My Dad Quit After 50 Years of Smoking and So Should You

by David@MoneyNing.com · 22 comments

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.
cigarette.jpg

  • 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?

Pass this on to your smoking friends.

Pay Day is Not Every Day But Today and Here is My Frugal Way

by David@MoneyNing.com · 10 comments

ten dollars

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?

Screw The Depreciating US Dollar

by David@MoneyNing.com · 11 comments

We listen to TV, radio shows, and podcasts mentioning it.  We read websites, blogs, and newspapers discussing it.  We talk to our colleagues, friends, and family about it too.  We are living through it, and we will survive past it.  All we need to do is calm down and forget about it.

Yes, I said “forget about it”.  Stop listening, talking and thinking about it because we got better things to do.

There are approximately one billion things the US dollar affects.  Some are negative but some are positive for us. How can anyone gather all the factors and say it’s good or bad?  All we end up doing is hearing, reading and seeing one thing and be optimistic, then be pessimistic the next.

Most importantly, there is not a thing we can do about it.  We can buy foreign currency, buy gold, and buy foreign stocks but we will still be worried because all our assets and income is in US Dollar.

The reality is that this situation is here to stay for months if not years.  Learn to deal with it and not complain about it.  If things cost more, buy less.  We are born adaptable and flexible.  We can and will get through this so just forget about it and definitely stop worrying about it.

We Should Buy Index Funds Instead of Stocks Even If We Can Beat the Market

by David@MoneyNing.com · 11 comments

stock marketMany of us that frequent personal finance sites are passive investors. We buy index funds because we aren’t convinced that anyone can outperform the market in the long run. However, some of us still buy stocks because we believe beating the market by taking on more risk is possible. Some of us fail, but even if we succeed, we should buy index funds.

Why? Our goal is to become wealthy and not beat the market. Many of us feel that our money will grow faster if our returns are better. While this is certainly true, imagine how our attitude towards money is affected when daily fluctuations are high. Some of my stocks are pretty volatile, so I look at my performance daily (buying more and selling shares when needed). Recently, the value of my portfolio changes more than $1,000 per day at least 30% of the time. That means that I could be $1,500 richer one day, and $3,000 poorer the next.

Let’s say today’s move was $3,000 to the down side. Why would the $5 dollar Starbucks coffee feel like anything? Losing $3,000 and $3,005 is pretty much the exact same thing. Now on the brighter side of things, $5 is nothing when it means gaining $1,500 and $1,495 for one day.

I can really see this happening to myself. I’m starting to lose my attitude to save. When my portfolio loses money, I feel like another couple bucks isn’t much. When it gains money, I feel like I can afford it. This means that every time I feel this way and spend money, I’m losing the opportunity to save and grow it. Little things add up, and although we may be able to beat the market for years, we might still lose because we have lost all the extra opportunity to keep funding our investment accounts.

Slow and steady wins more ways than one.

Why My Nintendo Wii is My Best Investment of The Year

by David@MoneyNing.com · 18 comments

nintendo-wii.jpgYesterday, I finally took the plunge and joined millions of other people and bought a Nintendo Wii. Like many personal finance bloggers, I’m here to blog about the purchase. However, this is not a post to justify my purchase. In fact, I know it was well worth it, as indicative of me purchasing the machine. This post is about why I think you should buy one too.

It actually took me since Nov 19, 2006 (the day the Wii was released) until yesterday to finally decide that this game console was worth the $249.99 + tax. Since that day a year ago, I have been contemplating whether or not I should get this game console. All this time, I thought it was a luxury purchase. It is $250 that can be put into a savings account, or into investments (like at least 25 shares of ETFC with some $$ to spare) I keep thinking.

The thought of a personal finance blogger buying luxury goods kept me from purchasing the console until a couple days ago when I realized that the machine is not an expense but rather an investment.

Exercise
Since I bought the Nintendo Wii, I have moved around much more than I would otherwise. This is good for me because I basically sit in front of the computer all day now, gathering weight day by day. Although it is not a conventional way of doing exercise, whatever works is fine right? Actually, this is working out so well that my fiancée is offering to buy me another game to keep me interested.

Spending Opportunity Lost
With me playing the Wii at home, it keeps my mind off other activities that makes me spend money. All the time that I’m playing the Wii, I am not buying a drink at Starbucks, browsing in the mall, or going to see the movies. Although the Wii is a bigger upfront investment, it actually saves me money down the line. I know some of you might not agree, but many of my expenses are impulsive. If I’m occupied with something else, I won’t be giving myself a chance to accidentally spend money.

Family Time
This is perhaps the most important benefit of buying the Wii. My fiancée, like most other female, do not really play video games. However, she is very attracted to the Nintendo Wii. We had so much fun playing the game console today that I wish I bought the Wii months ago. This gives us yet another past time that we share, and I’m sure spending more quality time together will indirectly strengthen our relationship even more.

Like many of you, I have thought about the justification of buying Nintendo Wii time and time again. I was focusing my decision on the money aspect of making the purchase. However, the ROI of getting a Wii is not about the money but the indirect benefits. Now that I have purchased the game console, I’m proud to say that I’m very happy with my purchase and that it is the best investment I have made this year.

Thank You Nintendo.

Reduce Your Taxes Forever

by David@MoneyNing.com · 12 comments

I just found out today from a comment at one of Blueprint’s article that you can deduct state taxes from your federal taxes. I just don’t think this make sense because that makes the state tax useless as the governments should figure this out amongst themselves.

Without getting into a debate on that though, I want to ask everyone whether they knew this or not. This is probably written somewhere in those thick booklets that has all those tax forms, but who understands and keeps up with all the tax laws? Everyone knows the general rules, but I bet we miss out on many of the possible ways to deduct our taxes because we just didn’t know it could be done. Here are a couple of ways that can help us in this regard.

Tax advisors – They seem a little expensive because they charge quite a bit to do your tax. However, they have the potential to help you save more money than they charge because they know all the tax rules and changes and can get you the maximum tax benefits.

Tax software – This started getting very popular the last couple of years. The software would ask you questions which you answer and the forms will be printed out for you to file. It is easy and will probably help you save some money as long as you explore everything that the tax software offers because some money saving tax forms could be buried inside the menus.

Media – Tax laws are mentioned anywhere at anytime (like this article in the middle of October). As long as you keep your eyes out and don’t mind learning, you will pick up all kinds of tips to help you reduce your taxes.

Is there anything else you can think of to help us keep up with the tax laws without reading those booklets? Please share so we can learn about your secrets.

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