Sharing insights since 2007 on carefully saving money, investing, frugal living, coupons, promo codes because the little things matter in achieving financial freedom!
I’m in Canada and my grandfather is doing better now even though he will still be in intensive care for another few weeks. It is a sign of relief for the whole family and hopefully it’s nothing but good news from here on out.
Every day, we have a 35 km (approximately 22 miles) ride to the hospital. We did some calculations and we are literally spending $20 on gas (our car in Canada still wastes tons of gas) and another $19 on parking every single day. Since it is a full day event, we leave approximately 9am and leave around 5pm. So the rush hour traffic was not helping make it any faster nor cheaper.
Today, we decided to take the subway from now on. We figured that the expense would be as follows considering that we have to drive to the subway station:
$2 gas for driving to the subway station
$5 parking (to park our car there)
$16.50 (two way fare for 3 people)
This means that we will save $15.50 per day, not to mention that we don’t have to waste our energy to drive in traffic. Too bad there’s no way to ride the bus to the subway station since we would save even more money. In our case, it might even be faster than driving the whole way since Toronto traffic is EXTREMELY bad during rush hours. It’s very surprising to me since I live close to Los Angeles and I’m used to traffic.
So to save money, energy and time, be frugal and use public transportation.
The holiday season is coming and our company asked us to participate in the annual Secret Santa event. Secret Santa for those who aren’t familiar is a game where each person buys a gift for another person. Everyone picks a person to buy the gift for by drawing the name out of a hat and the recipient of the gift is never supposed to know who the gift came from. The idea of this is very good, but the last few years have seen the price limit of gifts skyrocket.
Every year, we say that the rules are to buy a gift that falls in the $10 – $15 range. This is good because it keeps the dollar amount low so everyone can concentrate on the fun spirit of the game instead of thinking that it will break his/her wallet.
Last few years though, things have changed. There were some people that literally buy gifts that must be worth at least $100 dollars. Some of you might think that this is fine if the person wants to spend the money but what ends up happening is that everyone else is pressured to buy a more expensive gift now. (It is interesting to note that the boss always get the most expensive gift.)
Instead of the game being fun, it has turned into a good size expense for people who participate. The game is supposed to be fun and creativity should be a big part of it. The excuse that one cannot buy anything for $10 – $15 is just incorrect. The point of Secret Santa is so everyone gets something around Christmas and seeing what everyone else gets, not to mention the fun we get with shopping for the gift. There’s nowhere that says gifts have to be at least $50.
It’s Christmas. Enjoy our Secret Santa game and don’t spoil it. I hope that everyone that works at my office stumbles onto this article before they buy their gifts this year..
What about you? Does your company host Secret Santa? How is your experience there?
Let’s face it. We as individual investors are very afraid right now. Did you notice all the articles from us personal finance bloggers about the market throughout the year and the lack of them right now? Part of it is because we all want to cover the thanksgiving spending etc etc, but it is also because many of us don’t even want to think about our investments. If March or August of 2007 was a fearful time for individual investors, now is many times worst.
So, what is our investment advice now? What should we do in these times when people are telling us that the decline just started because all the mutual fund investors (the general public) will start selling once they receive their quarter statement and realize that their investments returned nothing for the past year?
Instead of giving some general advice, let’s break it down to different types of investors so the advice is more specific. There are three types of investors: passive investors, stock pickers, and short term traders.
Passive Investors – I hope this includes most of us because it takes a considerable amount of time to invest in stocks. We buy low cost index funds and have a long time horizon. For us, we shouldn’t care about volatility and we should buy more shares right now. Even better, we should setup automatic investing so we keep investing whether the market goes up or down. If you are very unemotional about your investments and have a VERY LONG time horizon (5 – 10 years+), you may want to look at the financials but buy the ETF that looks at the whole sector instead of buying a specific stock because you are a passive investor.
Stock Pickers – Many of us fall under this category. We use a portion of our money to buy into certain stocks because we feel like we can outperform the market. Those of us that buy individual stocks should move into defensive stocks. Just think of all the companies that people would still buy from no matter what the economy does. P&G is a great example because they sell many day-to-day products like soaps. These types of companies aren’t exciting in bull markets but they deliver the necessary consistency that people can count on in a bad economic environment. Now is not the time to bottom pick financial stocks. Even though they may seem very cheap to you, it may just keep going down in the short to midterm. Just wait till these stocks seem to keep going up to jump back in but there is no reason to get in at this point.
Short Term Traders – Well, I’m just going to state the obvious for you guys since you probably shouldn’t be trading if you don’t know this already. I would either see which stocks/sectors you can short or just sit and do nothing. There is absolutely nothing wrong with doing nothing. Sit with your cash and just wait till there is a bull run again. Whether it is 3 months or 6, you can just ride is out.
Mixture – In the real world, almost all of us fall under a mixture of all 3. If we are smart, we will try to separate into 3 different portfolios and follow the strategies accordingly because it will be impossible to not get confused.
Now is a fearful but interesting time. What we do during these volatile times is much more important because we can really destroy our portfolio and wealth by acting inappropriately. Whatever you decide to do, not losing money should be number #1 on the list. To help that, the first thing we need to do is stop investing based on headlines.
My Uncle buys gift cards from coffee shops for his own use. He told me that it is very convenient because he goes to the coffee shop everyday and can just order his latte and charge it on the card. When the card runs out of money, he can just reload it with a credit card. All this did not really make sense to me at the time but I figured I should go home and think about it before I disagree with his theory.
After some thought about it at home, I still do not get it.
It seemed to me that paying with a credit card would give the same convenience that a gift card would. When I pay with my credit card at Starbucks, I do not even have to sign for my purchase. Other than the fact that I would get one transaction each time I buy a drink instead of one per gift card purchase, I really cannot see any advantages of using a gift card.
However, the disadvantages of buying the gift card means that I am prepaying for my purchase ahead of time. I am in effect giving out an interest free loan to Starbucks. What makes it even worst is that the loan documentation (the actual card) can be lost, making the loan non-collectible (Side note – Can I sue Starbucks for default on the loan?).
The other downside to buying a gift card (especially a Starbucks gift card) is that it indirectly makes you buy (drink) more. When we already prepaid for a gift card, we are much more likely to go into the store and purchase something because the money does not seem like it is coming out of our wallet.
There seems to be only downside and no upside. My question is – Do you buy gift cards for your own use too? Why do you do that??? Anything I am missing here? Any information would be great before I go bat some sense into my Uncle 🙂
Recently, my dad quit smoking after years of us encouraging, motivating, persuading, yelling, and cussing (you name it, we’ve done it). It was a struggle for so many years, but the fear of sickness finally convinced him to quit smoking. Many of us smoke (in fact, one third of all male in this world do), but none of us ever think about the harm it has on our body and our wallets. From experience, I won’t dare try to convince anyone to quit smoking, but here are some financial facts we should all consider every time we light a cigarette.
At $5 a pack of cigarettes, my dad could’ve accumulated $1.6 million in investment and savings. This is assuming that he would invest or save the money weekly for 50 years earning 10% annually. 50 years ago, the cigarettes were not $5, but my dad smokes more than one pack of cigarettes many days of the year too. This also does not include the cost of lighters or matches.
His life insurance is much higher because of his “experience” in smoking. Actually, we were told that his insurance would probably be 1/4 if he never smoked.
His health insurance is the same thing, read the life insurance point again.
Non-smokers receive home owners insurance of about 10% less because there are fewer chances that they will burn down their home.
Non-smokers usually perceive a better image than smokers which indirectly lead to a higher salary. This is due to smokers potentially having yellow teeth, bad breath and smelly clothes.
Those extra packs of gum, extra trips to the dry cleaners all add up in our lives.
The list goes on and on. Smoking ranks as one of the most harmful activities we can do to our physical and financial health. If you read this blog because you want to live financially free, why don’t you quit smoking too?
I will feel rich, I will feel happy, and I will feel obligated to spend some money. Or will I? I actually get a paycheck every 2 weeks, and other than feeling richer on paper, there really isn’t much different on this day.
First thing in the morning, I visited Wells Fargo’s website to make sure the direct deposit went through. Then, I logged into my credit card website to see how much I owe in the next payment. Once I subtracted the difference, I deposited most of my paycheck into the online savings account to be allocated to my investments.
What I do is quick, boring but effective because I’m able to save so much money this way. By moving my income after set expenses into my savings/investments, I won’t feel like I have a ton of money to slurge. I know this is all psychological but it works.
In a way, this is the manual and enhanced version of “automatic savings” and “pay yourself first”. I do this process manually because I am not able to make this automatic, as I don’t really know the exact amount since my income fluctuates. Also, my alternate incomes are always irregular and setting scheduled transfers wouldn’t work in my situation. It is an enhanced version because I am not only moving a set amount each month but a vast majority of the excess income into savings first. Since I do not really consider my saving and investment accounts as a source of money I can currently use, I end up increasing those accounts rather quickly as I VERY rarely withdraw from those accounts.
This is my way of being frugal on my pay day. How do you spend yours?
Free signup to get a free ebook on How to Save Money on Everything! Constantly expanding, it will be the biggest money saving ebook available, and it's FREE! →
(I hate spam and promise that your information will never be shared.)
