Tag Archives: finance

Uncategorized

How to prosper during the coming depression, Money

 

There are two huge problems that come to mind when I think about the average American and money, we own a lot of debt and most people could not write a check for a $500 emergency bill if they needed to. We have a bad habit of looking at what we make in a month and figuring out how to spend most of it or more if we can. Currently, being unemployed sounds like a dream come true with a $600 bonus given to unemployment recipients on top of what the state is handing out however as I write this on May 13, 2020 that bonus is drying up in July. After that good luck paying your bills.

I have hopes that this virus gives the average American a wake up call on their personal finances and last month 2.1 trillion dollars was put into savings accounts, something that hasn’t happened since 1981. When it matters Americans will save money but when it counts you quickly learned its not enough to cover what is to come. Back in 2009, people squeezed their wallets and cut out all the things they realized they didn’t need. Vacations were cancelled, kids were pulled out of over priced prep schools, cars were sold or handed back to the bank, less people ate out for meals, the coffee pot had the dust cleaned off of it, cable service was cancelled, and the latest fashion trends were traded for the years prior. People know how to save money, but when the situation is going to be worse than 2009 with little chance of a bail out for the little guy how far are people willing to go to save a buck?

Considering the interest rates that people have on their debts compared to the interest earned on savings accounts we should talk about debt first. If you are looking for a more comprehensive approach to paying off debt check out The Total Money Makeover by Dave Ramsey. To sum up the easiest path to getting out of debt, pay off your small bills first. Dump everything you can into getting rid of those debts and move up to bigger items over time. Pay off the credit cards and hospital bills that have been killing your credit. Get the debt collectors off of your back until you have the car and house left, if you have payments on those, then work on the car balance. The quicker the better. If you have a manageable house payment, I would suggest only making the payment during the depression instead of paying it off. The monthly payment won’t go up while the cost of other items will during that time. With your other debts out of the way you now have cash to buy the things you need while keeping a roof over your head.

Cut down your monthly bills as much as you can. I know that during the stay at home orders everyone is watching more television, and if you are smart you pay for internet and a few streaming services which is a hell of a lot cheaper than cable TV. At this point you may want to consider which service you enjoy watching the most and cutting out the rest. How much Hulu, Disney plus, Amazon prime, YouTube red, Netflix, or google plus can you really watch? What shows do you enjoy, who offers the most content and get rid of the rest. Let’s face it, the Mandalorian was the only good show on Disney plus unlike the Star Wars movies they have been making the last couple of years. Cut the rest of the crap out of your budget and start spending more time doing other things besides sitting on the couch.

Cancel your gym membership, you haven’t gone since January and your new years resolutions disappeared along with the rest of your plans for 2020.

Put your Keurig right where it belongs, in the trash. Each box of those stupid pod things only gives you twelve cups of coffee. A bag of coffee will give you 12 pots of coffee with 8 cups in each. Do the math you are getting screwed and NO the coffee does Not taste better.

Say goodbye to Starbucks and Biggby coffee. Have they ever made your coffee how you like it? Stop handing your money over to people who can not spell your name right.

Most of the clothes I own I bought at second hand stores. You would be surprised how many new clothes are tossed to your local goodwill and salvation army thrift stores because they don’t fit correctly or they are out of fashion. You can find name brand items for a fraction of the retail cost.

Just because there is a sale, or some kind of deal, at a store doesn’t mean you have to buy that item. There was one black Friday when a co-worker posted the $1000 television they bought for $300. They bragged about saving $700 until another co-worker commented that they saved $300 by not buying a TV that they didn’t need. You can argue amongst yourselves who was the smarter of the two but at the end of the day the second co-worker still had $300 in their bank account.

Cook at home. Don’t tell me you don’t know how to cook. The instructions are on the box. Cooking is like sex; you only get better at it with the more you practice.

So now you are saving money and maybe you have a bit sitting in the bank. What do you do with it?

There are several options available to you. Personally, I like the Ron Swanson approach and have a bit stashed away in gold and silver. Can you make money on buying precious metals, sure. It’s simple math. Buy low and sell high. It’s like any other commodity. The point isn’t to make money though it is to protect your wealth against inflation. Precious metals can be traded anywhere and keep their value. Money on the other hand fluctuates and tends to lose its value when the economy goes into turmoil. Precious metals tend to do better when things are rough. It is never a bad idea to have a bit stashed away in case an emergency comes up.

US savings bonds, don’t expect these to mature during your lifetime with a current interest rate of 0. With a national debt of 25 trillion dollars coming up by the end of this year I doubt any of those will be paid out in several decades if at all.

Stocks, the stock market is the one pyramid scheme that came up with the best sales pitch of the last 100 years. It’s like Amway except when you are about to cash out the market tanks and you are stuck working until 70 years old because all of your savings disappeared while corporations were bailed out. This happens like clock work every ten years.

Savings accounts, I started a savings account for my new born daughter a few months ago. I put $100 in there to start out and three months later I received a statement that her new balance due to interest was $100.01. The current interest rates for savings accounts is under 1%. At this point what is the difference between having cash at home you can access at any time and money in the bank that doesn’t gain any value, while they are loaning your money out to other people I might add?

It is important to have assets. Pay off the house. Own land. Find things that increase in value instead of depreciating over time. When you drive that new car off the lot it immediately loses value. That signed copy of Fear and Loathing in Las Vegas sitting in the case at the book shop will continue to gain value over the years. The days that a man enjoys owning a boat is the day he buys it and the day he finally sells it. If you have a hobby besides beanie babies take advantage of the knowledge you have. It is not hard to find things that are overlooked at estate sales and build a collection of wealth under people’s noses. Recently I bought a copy of A Cook’s Tour by the late Anthony Bourdain. I later found out that the $3 first edition hard cover copy was signed by the author. A book that regularly sells for $250 on eBay. I could flip it and take that money to do other things but Bourdain isn’t exactly losing any popularity these days. I think it’s a safer bet to sit on it and wait until I need that money and cash it in later for what will still be more than $3.

To summarize my savings advice, keep money in the bank if you don’t like having access to it and like having other people make money from it except for you. Gold and Silver are safe bets for long term security of your wealth. Invest in things that you know will increase in value over time, except Beanie Babies. Buy land.

Book list:

Total Money Makeover by Dave Ramsey

Standard
Uncategorized

Four weeks into Project 2020

So far, I have only missed one day of working out, and considering how sore I was that day it is good that I did. My workouts have been mostly weight training, building muscle in order to burn more calories later on. I have concentrated more on arms, chest, back, and legs. Abdominal muscles will come into play when I introduce cardio next month. Starting on the first I will alternate between cardio and weight training. The cardio workouts will include enough abdominal exercises to satisfy my need for an ab workout. Weigh in will be on the first of February and hopefully I will see some changes for the past month of work.
My last mortgage bill included the current balance of just over $47,000, which means I have paid almost $1000 on the principle in under a month. My auto insurance prevented me from making another payment, along with a need to buy some food for the next couple of weeks. My stash in the basement is running low and I had to start focusing on protein, vitamin, and mineral replacement. After two weeks of weight training I started to wake up sore, a good indication that I wasn’t eating enough of what my body needed to repair itself.
As of today, I have read 29 books this month. Some of the high lights include Quicksand by Henning Mankell, and Phone by Will Self. I branched off into a few other things along the way and pulled out more books that I had abandoned along the way in the past years. I only set my goal for 2020 in Goodreads to include 100 books and at this rate I might blow past that before the half way point of the year. I have an idea for next year, calling it my big book year. Books I read have to be over 600 pages and I have to start out with Ulysses by James Joyce only because it has been on my list for too many years along with a few other long reads that I have been reluctant to pick up. I have a feeling that many of the books I read this year will find new homes after I read them and that should free up some space after I am done.
As of today, project 2020 is ahead of schedule for most goals. I don’t know how this will end, if my mortgage will be at a more appropriate balance that makes sense to me or if I will have that six pack in five months that I’m planning on. I watched a video on YouTube today about a man who ate his weight in beans in a month and lost some weight doing it. Maybe it would be a fun, yet smelly, goal to set for this project. I haven’t come up with any new goals, food wise, for this project but I am actively looking for things to try.

Standard
Uncategorized

Project 2020 is a go!

Every year there are things that I set out to do and most of them are left as distant memories sitting in a smoldering pile of crap. These are goals I set for myself and are quickly forgotten for various reasons. The excuse of “Life” is often used, and going along with life has only gotten me so far. After turning forty and running out of excuses I have decided that it is time to “Man Up” and make these changes that I keep telling myself that I need to do. The new year is as good of a time as any to try something new and see what sticks and what doesn’t.
This project has three different aspects to it; reading, fitness, and finance. Why did I pick these three? They are the three things that have irritated me the most about my life. I don’t read as much as I would like, instead always choosing to watch some shitty show on Netflix and wasting my time that could be spent doing something more productive. Skipping to finance, it bugs the crap out of me how much of my monthly payment on my house is eaten up by interest. Instead of complaining I think it is a better idea to do something about it and have some joy in knowing the mortgage company won’t make as much as they were hoping. Finally fitness, my dad had a second heart attack this year and while I am young I have noticed that I’m no longer in the kind of shape I was in at 30. Lifting weights and running were part of my daily routine and since I moved into my wife’s house there isn’t any room for exercise equipment. Walking as become my routine, towing my daughter behind me in a wagon, but that hasn’t kept the pounds off and reaching an ungodly 225 pounds. I haven’t weighed that since I was married in 2003 and back then I bought P90X shredding down to an athletic 185. Even when I was at my most muscular state, I only peaked at 205 for a frame of 5 foot 9 inches. Either way, I need to lose about 40 pounds.
Reading challenge is as follows, each month there will be an author that I will read. At the end of the month I will reveal the books I read, what I thought, and what I recommend. The list of authors is as follows:
Jan- read unfinished books and clean out Goodreads list.
Feb- louis L’amour
March- Will Self
April- Craig Johnson
May- Joe R Lansdale
June- Thomas McGuane
July- Jim Harrison
Aug- Larry McMurtry
Sept- E. L. Doctorow
Oct- Mark Twain
Nov- Philip Roth
Dec- Michael Perry
Read along if you like, my current reads will be logged in on Goodreads under Matthew Gilman.
Workout Goals include:
-lose 40 pounds by June 2020
-Eat less carbs. Limit myself to 1-2 drinks per week.
-Eat oatmeal every morning.
-Drink 2 glasses of whole milk after every workout.
While I do have a schedule of things I would like to do I have decided that I need to ease into things and set the bar low at first. Free weight workouts will get me started in the winter months while I also play around with diet. I want to see what kind of changes I can get from playing around with carnivore diets, paleo, vegan, and intermediate fasting. I’m not that interested in bulking up since my joints might be able to handle the weight they once did over a decade ago. While I experiment with these diets I also want to find recipes in cookbooks I have collected over the years and not be stuck with the same boring crap you would see an athlete or bodybuilder eating.
Finance Goals:
Obviously if you want to pay down a mortgage you start by making payment towards the principle. I sat down and made a budget for the year that doesn’t give me much wiggle room. If I keep myself busy with the two other goals, I should be able to stash away $1100 a month towards my mortgage totaling $13,200 for the year. It’s a good chunk of cash and I’m hoping I will see some results when it comes to the principle. Any other money that comes my way will also be thrown at that monstrosity. We will see what the end result is.
So, that’s it, my project 2020 for the coming year. You can also find videos on YouTube at Typing Piper and follow along there with updates.

Standard
Uncategorized

Financial independence is not designed for you

I am tired of listening to shows like Dave Ramsey and hearing people call in with six figure incomes wondering what they should do with their surplus cash. These are not the people dealing with hard times, barely making it with little to show for their work. I will take this one step further and say that if you have a college education, a six-figure income, and you still can’t figure out how to manage your money then you deserve to fail and we should let financial natural selection take its course. This blog is not for the wealthy idiots out there playing with index funds and credit default swaps. This blog is for the 40-hour work week, car payment, house payment, no retirement, no savings, ex wife stole half of my 401k, why is my mortgage payment still going up, kind of guy.
I have read several books on finance, FIRE, debt management, and the millionaires next door. One thing these books have in common is leaving out the lower middle class writing them off as too poor to work with and not worth helping. We make up the majority of our population and to write us off as not worth helping shows a lack of imagination, in the meantime Wall street takes our money in the form of 401ks and 403bs balancing out their books, throwing any of their losses our way. We are stuck not knowing any better, happy for a 1-2% increase in our portfolio while all the gains made with our money is shifted elsewhere. This is where my lack of trust stems from. I saw what happened in 2009 and knew from that moment on I would never trust any of those sons of bitches.
I’m not here to say people can’t find some kind of independence. I have met people over the years who do fairly well for themselves on very little money. Is it ideal, no. Is it better than that paycheck to paycheck life, yes. There are many things people like Dave Ramsey got right. In some ways everyone got something right, what is wrong about these books, talk shows, blogs, and podcast is that they leave out the little making them think there is no hope. Finances are not just a game for the big players. Keep in mind, even professional bowlers make up to $30,000 a year. It’s not much but its not nothing.
I was lucky back in 2005 when I initially bought my house. When the mortgage company told me I could buy an $85,000 house with a $700 a month payment I told them they were out of their minds. “But the computer says.” Lucky for me I had seen the Terminator movies and knew that computers were out to get me. These suits weren’t looking out for my best interest and I knew that. I ended up with a $65,000 house with a monthly payment that was the same as the rent I paid on a one-bedroom apartment. On $10 an hour I could barely afford that.
The years passed and the hospital I worked for continued to screw people out of their raises, my insurance company continued to jack up the rates on my coverage until my monthly payments were one hundred dollars more than when I bought the house. In 2008 the economy went to shit, my wife left, I was stuck with a house payment, car payment, thousands of dollars of debt, and a job that had not given me a raise in several years. Like the rest of the country I was being bent over a desk, no lube applied, waiting for the ride to end. Then I decided to no longer play the victim.
The credit cards were the first thing I paid off. The monthly payment was a meager $50 on average, I threw hundreds at it and watched the balance shrink. When that was paid off, I cut the cards up and went to work on the car loan. I tore out payment slips from the book, sending in 2-3 at a time. The car was paid off two and a half years early. Looking back, my only regret was stopping there. I had money in the bank, I was able to life something resembling a life, and for the first time was able to do things when I wanted to. Ten years later I wonder what my life could look like if I just went to work on paying the house off. Now it’s time to find out.

Standard
Uncategorized

Project 2020

I have to admit that I tried this a few times before. Sometimes it worked and other times the project was abandoned. In 2009 I found myself divorced, in debt, and feeling disenfranchised with life. Something had to change. Ten years later I have a similar feeling, now at forty with years of debt ahead of me, again I thought to myself “something has to change.”
My house was refinanced back in 2009, setting the clock back to where it started, $65,000. Today I owe just under $48,000. This is less than it should be since I have made payments over the monthly amount desired. Still, I’m not happy with this and the more I think about it the better off myself and my family will be if I just pay the damn thing off.
Looking at some calculators available online I discovered a big difference in how much I will actually pay for the house depending on when it’s paid off. If I were to speed up the process and pay it off in ten years, I will save $6000 in interest over the life of the loan. However, if I were to pay off the house in five years, I will save $20,000 in the end. That is a huge difference over such a short period of time and I wonder how much I will save if I do it in less then that.
There are many advantages to not having a mortgage payment. That large chunk of your paycheck is finally yours. You can now invest in things like retirement, that thing you should start when you are in your twenties but you have no money, no health insurance, student loan debt, and of course rent or a house payment. How anybody is supposed to get ahead in this world is beyond me, but I do know “they” like it that way.
There are a few aspects to this project. For one I will be paying all other bills first before paying the mortgage. Whatever is left goes toward the monthly bill. This means, no eating out, no luxury buys like books, no spontaneous purchases, no more typewriters, no more wine. This isn’t all bad. I have, through a side gig, over 350 beers saved up from work I have done over the years. Alcohol is taken care of. I have more books than I could read in a year. I have more projects sitting on a shelf that I know what to do with, including this blog. Needless to say, I have more than enough things at home to keep me occupied, ensuring I don’t need to spend any money throughout the year.
My income is set, I have a job that pays by salary and therefore I know what I can expect to bring in throughout the year. Currently, I make between 35-36k a year, before taxes, insurance, healthcare plan, and Union dues. In the end I might bring home 25k but I would rather not think about that. My bills are a small percentage of my income and therefore I know I can pay more on my mortgage if I want to. At the moment the house is crammed, there is too much stuff, and the last thing I need is more stuff.
The goal is to see how much of a dent I can put into my mortgage by the end of the year. If I am just under 48k as of Dec 2019 my goal is to be under 40k by this time next year. It’s not a huge amount but I figure it is more reasonable than saying I will pay it all off only bringing in half of what I owe. There are things about this that will suck. An inability to do what I want, missing out on good food, picking up that good deal on that thing I don’t need but really, really, REALLY want. Yes, this will suck but it can’t be any worse that how I felt in my 20s.
In the near future I have more money coming my way. My cell phone will be paid off and I can put that extra money towards the mortgage. My car payment is paid off six months in advance. During the summer I am considering walking to work instead of fighting over parking spots, saving on gas.
I would like to write book reviews for this blog, it seems to the only thing that isn’t censored these days. A few weeks ago, I started writing for Rotten Tomatoes and a week later my reviews started to disappear. There wasn’t an email, no notifications on my profile, they just vanished.
So, follow me here for uncensored content, learn how to pay off your house early, and maybe listen to me bitch about movies and bad TV. Never mind the last one, the internet needs less of that.

Standard