Mid-Week Milestones

This week marks a couple milestones for us.

• My oldest son is graduating college
• My oldest car reached the 300K mile club

I don’t know which is more remarkable.
Eric has successfully graduated, or soon officially will be, from George Mason University with a degree in Computer Engineering.

So if anybody out there could use a good young energetic IT guy who likes network security and database management, let me know! I think I just might know somebody who would love to help you out. 😉
Seriously feel free to contact me. . .
Eric had the same deal that all our kids have.  If you stay home after high school, you WILL go to a local college full time and earn a degree.  The alternative, other than going to college someplace else, in which case we would help up to a point financially, was not particularly attractive to either him or us.
Needless to say, he picked George Mason and lived at home.
This worked out well for everyone.  He got a degree with a lot less expense (no college room and board fees), very little debt and we got a live-in who would help with the kids and shopping from time to time.
A win-win situation if you ask me.
Now the deal is done and sorry Eric, we love you, but the real world awaits!  Go get it!
Regarding my car and the 300K mile club. . .

I have a 1997 Acura 2.2 CL which despite its Brand Name is an American Car.  In fact, the CL was the first Acura to be built in the United States.  All CL’s were built at the Honda Marysville, OH plant.  I bought it second hand back in 2002 from a local used car dealer and yes I approached my purchase with a certain amount of skepticism and I had a plan.

The car, remarkably, sat on the lot for well over a month, actually nearly two.  I think I first saw it and test drove it after about the 3rd week that they took possession.  Of course, the price the dealer had was, IMHO, a bit high and more than I wanted to spend and yes he used many of the standard “sales” tactics to try and convince me otherwise.

But, like I said, I had a plan.

I kept coming back every Monday to see if it was still there and negotiate a better price. I actually had spent quite a bit of time looking at different cars and ended up liking this particular CL the best.  Not because of the price, not because of the reliability, not because of the performance, but rather the reason I liked this car the best was that it was one of the few I could comfortable sit in and drive. I spend up to 2 – 3 hours every day driving so I better be comfortable while doing it.
I knew I wanted this car. I also knew I did not want to pay the dealers price.
The dealer knew I wanted this car. It was just a matter of time to see how all this would play out.
The longer the car sat on the lot, the better my negotiating hand became.
I ended up taking it on more than one test drive; in fact, I conveniently dropped it off at my favorite mechanic during one of those “test drives” and got a clean bill of health from him.
So, on my last weekly visit, which happened to be the last week of the second month for the dealer, I nonchalantly said, “I see it’s still here” 😉 .
It was at that time, after at least 3 -4 weeks of me coming back in, that a price I felt I could afford was negotiated and the prize was mine. I have enjoyed it and comfortably sat in it ever since!
And the best part, I knocked nearly 25% off the dealers original price.

Better late than never

My 2011 Goals.

You’ll notice not one of them is being on time 😉

1) Eliminate Non Housing Debt

I gave this one a good start in 2010 but ran into some added expenses which set me back.
I have a monthly plan in place and I am going to stick with it. Hopefully I will be able to put a much bigger dent into my balance this year. Knock on wood . . .

2) Beat Averages

Last year I increase my return average 50% to set a new goal. That was ambitious. For 2010 I did beat all the averages but feel short of the 24% mark. If I increase my 20% return by 50% that would push my goal up to 30%. That is a bit too ambitious even for me. This year I am going to keep my “beat the averages” goal with a stretch goal of 24%.

3) Cut Expenses by 10%

One way to increase savings and add to paying off debt is by taking a long hard look at your expenses and “cutting the fat” as they say.

We currently do “OK” but I know we can do better. Especially in the area of finding and shopping for deals. Some of the phenomenal success stories of the past year has been the rise of sites like Goupons and Couponmom. This year I am going to take a more serious look at saving with coupons and actively look to “trim the fat” from our daily / monthly expenses.

4) Double followers

I currently have 24.
I’m actually going to split this one out to 36 followers with a stretch goal of 48.

5) Win Fantasy Football

I came oh so close to this but fell short in the end.
I may never actually accomplish this but hey, I’m keeping up the hope and the goal.
OK lets split this one too:

– East Coast wins the championship
– With a stretch goal of me winning.

6) Fence and Shed clean out Garage!

A few months ago, one of my favorite shows – Criminal Minds – had a quote at the end of the show regarding a statistic which stated before 1960, there were virtually no personal storage units in the US. Today, there is more than 2.35 billion square feet of self storage in the U.S., or a land area equivalent to three times Manhattan Island under roof. It seems that the U.S. certainly has become the land of excess sometimes and personally I would like to do my part in reversing that trend.

Now, we are nowhere near as bad as compulsive hoarders or anything like that, but like many people we have “collected stuff” over the years. Stuff we probably do not need nor use or even know exist anymore.

Welcome to my garage.

Part 1 of this goal is to declutter my life and garage. The decluttering should help in finances, free time and finally getting at least one of our cars into the garage.

Part 2 of this goal: Putting a shed in the backyard will help with storing outside yard tools and stuff like bikes and sleds.

Part 3 of this goal: Putting up a fence will help with keeping said shed stuff from finding little feet and ending up cluttering the neighbors yards and provide our dogs some true running room.

Speaking of dogs . . .

7) Get Lola a Forever Home

My daughter, Alaina, will hate me for putting this up here, but hey, maybe it will ultimately inspire her to add a 2011 goal for herself.

Lola is our current resident foster greyhound.

Current Resident, because she has been here about 7 weeks. This is almost an all time record for us keeping a foster before getting him or her adopted.

Foster because she is a foster, which means the intent is to find her a forever home (other than ours).

As you can see, she is a very cute black and white greyhound. And trust me she is very affectionate and playful and will make a good addition to any home.

Her original racing name was Rico’s Hailey and though many greyhound agencies frown on renaming a foster we took that liberty because, well, she simply was not a Hailey or Rico.

We tossed around several potential names like Betty; if you are familiar with Ram Jam or Leadbelly you will know the reference, but thought it better to avoid potentially politically incorrect names for a black dog. Lola seemed to be a name that she responded well to and, well, it makes for one or two rather good Kinks songs too.

Oh, There is just one little caveat.

There seems to be a condition which has come up recently that says if Alaina gets a job, she can keep Lola as a pet. Hmmmm – I wonder who came up with that one. So, perhaps Alaina will add getting a job to her 2011 goals. This will go a long way towards giving her some much needed money, added responsibility and convincing me to actually keep Lola.

But until then . . .

Please contact the Virginia Greyhound Adoption Society for more information.

The Economy is great !

You can find deals everywhere from Walmart (WMT), to Verizon (VZ) and AT&T (T), to fast food chains (Mcdonalds (MCD) and Burger King (BKC) $1 value items), to online brokerage firms (Both Schwab (SCHW) and Fidelity undercut the fee schedule of $7.99-$12.99 for most E*Trade (ETFC) transactions and a flat $9.99 for all Ameritrade (AMTD) trades), to; yes, even credit card companies.

This is a perfect example of deflation which is affecting nearly all parts of the economy.

All of the “excesses” of the previous economy, which was behind both the boom and the bust, have now created a climate of deflation.

Of course this is not good for businesses, as they now have to not only struggle with less consumer spending but now they have to deal with less revenue streams, and reduction in profit margins.

Yes, there is always two sides to a coin, and always a sword with two edges. The result of this economy unfortunately also translates into added pressure on people with lower salaries, unemployment, and defaults in credit and loans.

There is no utopia. There will always be a certain amount of insecurity, risk and “bad side” to everything in life. But there will always be the “good side” as well.

This reminds me of a quote I heard, “There is no security, only opportunity”.

Today’s economy, though far from perfect, has created opportunity.

Here is how I have taken advantage of some of this opportunity.

Credit Cards:

One of my resolutions this year is to reduce, hopefully eliminate, non housing debt.
One step I have towards doing this is to open a credit card account with a 0% interest and fee promotion. This last for up to 12 months depending on ones credit history and score.

The good side – no interest on balances for 12 months. This means my monthly payments go entirely to paying down the principle balance.

Of course as I pay down that amount, I apply (no matter how small an amount) the savings next month to my payment.

Coupons and Promotions:

This first month alone, we have been able to take advantage of department and grocery store promotions and coupons to save on everyday purchases. This enables me to apply these savings to paying down my debt even more.

So, how have all you readers, bloggers and Internet surfers out there found ways to save and take advantage of opportunity?

2010 RAP

R.A.P. – Resolution Assessment Page.

Welcome to my official tracking page for my 2010 resolutions.

Stocks and Finances.
1) Eliminate non housing debt. (credit cards etc.)

I’m going to use this as my 2010 debt tracker. Hopefully I can get the little scuba diver dude above water by year end.

This resolution got off to a rough start in January with some major car repairs and the need to replace a broken refrigerator. But for the month of February, I did manage to get my scuba guy nearly back to where he started at the beginning of the year.

2) Beat all DJIA, NASDQ, S&P averages with my investment income and do at least 50% better than the 16 % return I had this year. That means 24% annual return.

Yeah! February was a good month for my stock watch lists and achieving my resolution goals.

Starting Lineup

Bench

YTD Stock Tracker:

Sports and Fantasy Football.
3) To have the east coast win back the Borderless League Fantasy Football Trophy next year.

Obviously TBD. But hey, at least I am not loosing this one… yet.

Blog Related.
4) Double the number of people following my blog. I started the year with 10 followers.

I picked up yet another follower and added his blog to my google reader.

Check out the Work Forced blog!

January addition: Justin Harm and his blog Hopback.

This brings my count up to 12 now! Woo Hoo!

New Enterprising and Rewarding.
5) I’m starting a web site dedicated to donating to charities and activities that are most important to me and my family.

The Gift Exchange , is up and running and I have had a couple people browse on by and even register but I have not really produced the volume of auctions that I would like. But hey, it is new and hopefully I can get the word out more about this.

I need to do more in order to give this a smiley face…

Bad Karma – Revisited

So last year I did this post about things just “going wrong”.

Well, just when I resolve to get my debt taken care of, improved my bottom line, and get my finances in better order….

This month the following has happened….

What turned into get one or two new tires for my car turned into needing to get all four replaced, to an alignment repair and needing new brakes…

Then last Friday our refrigerator decide 63 degrees was just the right temperature to store food. NOT! So, forgoing repairs that would have approached a new refrigerator, we opted to get a new one. After hours of shopping online we narrowed our choices down to two models and then proceeded to shop locally for them at local stores. Well, needless to say, we found what we were looking for but we have to WAIT for delivery which is currently scheduled for next THURSDAY!. Arrrgh.

So now we are living on frozen food for a week not too mention that we will have to replace everything that went bad in the old one. DOUBLE Arrrgh!

So just when I was planning to reduce debt, I have added to it.

Perhaps I should have gone to a fortune teller before making my new years resolutions.

Speaking of which, I was looking online for a type of widget that would actually track my progress of reducing credit card debt and report it in percentage format much like my covestor widgets on the right sideline do.

Needless to say, I could not find one I liked. But I did find this…

Palm Reading Widget

Something tells me that if all palm readers looked like this, business would be pretty good.

So, starting next weekend, until I find a credit card widget I like, I will post my progress, for better or worse, on the right via a manual chart. And you will just have to take my word for it.

Oh yeah, and the stock market went really south this past week too.

But the month is not over yet. So, who knows what will happen between now and then.

Keeping Score

Perhaps some of you saw this article about a nurse who took on the IRS and won.

She took on the IRS regarding her claims that her MBA costs were deductible. She won!

I like the fact that she was able to take on the IRS by herself and win!

She did it by checking the facts, reading the fine print and being anal retentive and sticking to her guns and goals!

Education loans and expenses are one of the two types of debt that I can accept as being OK to keep.
The other is housing.

Both can be tax deductible.
Both are also considered, in my mind, investments and can lead to more opportunity and potential earnings.

When it comes to debt it is important that you keep a few things in mind.

First, A Budget!

You can’t do anything if you don’t have one.

Second, Just as with a budget, set goals for either staying out of credit card debt or goals to get out of debt. And stick to them!

Third, Keep Score. Track your credit report and score.

A credit score is a basis for determining or rating or your risk for assuming debt based on your credit history.

The score is based on certain factors, including payment history, the amounts you owe and the types of credit you’ve obtained.

Personal information like income, occupation, age and marital status are not considered.

Everyone is entitled to one free credit report per year. This report shows everything the credit bureaus use to come up with your score.

NOTE: The only official site to go through all three major credit bureaus is
AnnualCreditreport.com

A credit report will also give you another means of protecting yourself against fraud and suspicious use of your credit and finances.

Check out my post about the Identity Theft Game

If you do an Internet search for free credit report or score, you will get way too many scams listed in your search results.

Having lots of available credit is good. Good for emergencies, purchasing power, obtaining loans and lower rates on said loans, and good for your credit score.

This is where some people first get confused about debt and credit cards.

Debt is bad.

Credit cards are good.

They can:
– Earn you rewards which can be used for other purchases, plane tickets and even vacations.
– Allow you to pay bills on time, even automatically. (this is important)
– Protect against identity theft, and fraudulent activity. (important too)
– Help resolve disputes with vendors and merchants.
– Purchase protection.
– Interest free loans. (if you pay bills in full and on time each month)
– And last but certainly not least – Improve your credit score!

Of course, it is also recommended that you pay off any credit card debt each month, or at least as soon as possible.

Here’s why.

Let’s say I give you a penny today, and promise to double the amount every day for a full month. How much money would I be giving you on the 30th day?
The answer: over $5 million. Check it out:

It all adds up

Lets call this my compounded interest game!

Each day, the “interest” I paid you the previous day earns more interest. At the beginning, the amounts are nominal, but by the end we’re talking big bucks.
Of course, no one’s going to double your money every day. Not even credit cards. But this concept explains how people who save relatively small amounts over the years can build rather substantial nest eggs. After a few decades, their actual contributions represent only a small part of their burgeoning wealth — it’s mostly their returns that are earning returns.

It also illustrates how debts can quickly balloon out of control. If you’re paying interest, rather than incurring it, and you’re not diligent about paying off the finance charges in full every month, the unpaid amount will incur additional interest charges, increasing the total amount that you owe.

This is why so many families who incur credit card debt eventually find themselves in trouble as the amounts they owe explode past their ability to pay.

One of my new years resolutions is to pay off none housing debt. I have been “debt free” before and it is my goal to pay off my credit card balance.

There are a couple ways to go about this.
A) If you have the money and regular automatic savings to recover it quickly if you deplete it. Use the savings.
B) If you have the automatic savings and feel comfortable diverting that to pay off the debt, use the automatic savings each month.
C) After establishing your budget, find where you can make savings and put those savings towards paying off the debt. Chances are, this will have a two fold effect. First cut back on the expenses that are most likely adding to your balances each month and secondly apply these savings towards paying down your debt.
D) Move your credit card debt to an interest free card. This is more tricky now than it used to be.
– There are no more transfer free card programs out there. Everyone is charging 3% – 5% or more as a transfer fee.
– I would only recommend this if you can budget to pay it off during the 0% introductory period.
– Like everything else, do your research. There are a lot of different cards and programs out there with even more “fine print”.

E) Tip: As you pay off the debt, take the savings from you minimum amount (even if it is just pennies) and add it to your next payment. Remember the chart above!

F) And if all else fails and you are unable to come up with a reasonable plan or goal to be debt free, then ask for help. It’s OK. And in the long run you will benefit from it and be better off. A good place to start is here at the National Foundation for Credit Card Counseling.

Of course these are only suggestions. I believe that everyone needs to tailor their budgets, goals, and plans to their own individual life styles.

I would be happy for anybody to make other suggestions if they have them. After all, as with the nurse who took on the IRS, information and education is a valuable weapon.

As Always

Be good. Do well. Have fun.