Studying happiness is hard. What one man loves another loathes. One woman’s joy is another’s junk. Social scientists, therefore, have generally left the contemplation of smiles and satisfaction to poets and philosophers. But that’s changing.
Archive for April, 2007 Page 2 of 2
The reason why you aren’t a millionaire (or on your way to becoming one) is really quite simple…the truth is that for most people, whether or not you become a millionaire has very little to do with the amount of money you make. It’s the way that you tre
I don’t know whether to laugh or cry…
[youtube]MaIq9o1H1yo[/youtube]
But I do know 2 things:
1.) They paid way too much to produce this video
2.) They probably should get this thing off of Youtube ASAP because instead of attracting new recruits, it repels them.
(from Ben)
Ok as promised here is a glimpse at my personal financial infrastructure inspired by Ben Casnocha’s post awhile back. I am still working on it, and it’s difficult to truly stick to due to my current work situation which involves spurts of income instead of a consistent monthly flow, but it is at least a framework for how I manage my money.
Short Term Cash needs-
1. Combo of a HSBC and Chase Checking account- I just opened an HSBC checking account for reasons listed below, but for the time being I’m keeping my Chase Checking account open because it has atm’s just about anywhere I go, but most of my checking account activities will be conducted through HSBC going forward. I keep less than $1000 in my checking account at anytime (except when paying rent).
Medium Cash Needs -
I love my HSBC savings account (which is paying 6% on new money until April 30th(?), especially linked with my HSBC checking account. This is a no brainer, and if you don’t have one you need to get one. I really have been happy with their services, but just do a google search for “online savings,” to see the hundreds of others that offer a similar service.
How to use it: Your online savings account should really be the place where you keep the majority of your short term money, or money you’ll need access to say in the next year. Because you’ll earn interest on any money in the account, you’ll want to make sure your paychecks or direct deposits get in there asap. My goal is to keep my checking account as empty as possible because I don’t earn anything in there. I actually just added an HSBC checking account so I can withdraw money at HSBC ATMs (which are everywhere here in NYC) directly from my savings. I also can make instant transfers between my HSBC savings and checking ensuring that the only time money comes out of savings is when I need to pay bills or write checks. More time in savings = more FREE money made on interest. Even if you don’t have an HSBC checking account, you can still can transfer money between your own checking account and a savings account in under 4 days for free (usually, but make sure your bank doesn’t charge).
My goal is to keep 4-6 months worth of expenses in my HSBC savings account where I have easy access to it in case of an emergency. Once I have more than 4-6 month’s of savings (more like 4 months lately) then I move money into my personal investment account (below).
Long Term (1-10 years)
Any money that I don’t need access to for at least one year but under 10 I’ll keep in my scottrade account. In this account, my investments will be limited to stocks based on the Hidden Gems picks and a few of my own personal picks. I limit my holdings so that no stock at one time makes up more than 10% of the portfolio. I do keep about $1k in cash on hand at any one time to do short term options trades.
Long term retirement
I have some inheritance money from my mother in a managed investment account and I don’t plan on touching it for any reason except for a real estate investment and/or seed capital. I also will be open to investment opportunities in the next 5 years. The goal for that money is to let it grow and leave that money with my kids for them to have for college and adulthood. I’ll also continue to contribute to my own IRA.
Healthcare:
I consistently contribute the max allowed for HSA’s while young and healthy with minimal health care costs. This way I can build up a nice tax free savings to spend on health care in the future when they will be more expensive. This has been extremely dififcult to setup thus far in NYC, but I am very close to getting this all setup. I’m in the process of setting up an HSA with my broker so that I can minimize fees and maximize the returns on my healthcare savings.
Credit Cards:
I’m a big fan of credit cards. I know they are extremely dangerous if you are not watching them carefully, but you can really take advantage of them. I have 2 personal credit cards and 1 business. I only use 1 of my personal credit cards consistently, a Chase Rewards card that I have 0% interest on until April of 08. I earn rewards for the this card AND I earn interest on money I spend.
Here’s how:
I only spend within my monthly budget ( I try), so I always have the money on hand to pay off my credit card in full but because I have 0% interest on it for so long I don’t. Instead I put the difference between what I paid and what I owe into my HSBC savings account where I earn between 5-6% interest. As long as I keep a close watch on what I owe, and make sure I continually maintain that amount in my HSBC savings account I’ll have no problem paying off the card in a year, all while making money on THEIR money. Again, credit cards can be dangerous if you slip up on payments , but if you are careful you can use them to your advantage. The float can work for you even on a monthly basis. Just make sure you never carry a balance that is charged interest.
Spending..
I budget my spending for 4-6 months at a time using quicken for PC and adjust my holdings accordingly. I spend as much as my monthly spending on credit card as possible (as mentioned), but also always withdraw cash from ATM in $100 increments within my budget. Once a month I’ll spend a Sunday evaluating my spending, my contributions to hsa, medium term cash, long term investments, and staying within my budgets.
So there it is for now. It’s not perfect by any means, but it works for me right now. The real key is to at least spend some time thinking about your money and different ways you could manage it, otherwise you’ll just spend it until it’s gone. I’d recommend a personal money management software such as Quicken or Microsoft Money (even though they both are crappy in my opinion) which can automatically download your financial statements and categorize your spending.
Take a closer look at your own finances, you’d be amazed at where your money is going.
The real estate in NYC is simply out of this world. Here’s a list of the top 10 most expensive buildings in the city. Most of them are located near Grand Central or 5th Avenue and ALL of them are worth well over a few billion dollars. Billions of dolla
“They are undocumented, but they want to do everything right.” Remarkable article in this morning’s WSJ about illegal immigrants working hard to properly file and pay their taxes to a government that doesn’t want them here. Why are we trying to keep thes
One of the very first things I noticed when I moved to New York City was the unbelievable amount of Starbucks. I can, right now, think of roughly 7 Starbucks that are within a reasonable walking distance of me, 4 that are within 5 minutes of walking. You know what? They are ALL busy most of the time.
In this morning’s WSJ, there’s an interesting article about why Starbucks are popping up everywhere, when it seems there isn’t room anymore (there are currently 13,000 and they plan on adding another 10,000 over the next 4 years). The reason for so many? It’s simple:
“Where a lot of our growth is, is driving that incremental cup that someone may not have planned to buy,” he said.
They know that, especially in a walking city like New York, the difference between you buying a Starbucks coffee and not is whether or not you have to cross the street. So the more corners they can get on, the more coffee buyers they’ll get, and the more they can grow. For Starbucks 1+1=3:
The new store might take some sales away from the original location, but it could lead to far more sales overall. Jim Donald, Starbucks’ CEO, said one Texas store manager complained that his store’s sales of $1 million a year had flattened because of a new store across the street. But the new store, which had a drive-through, was on track to bring in $3 million its first year. So in the same vicinity, Starbucks was now pulling in $4 million a year from two spots rather than $1 million or $3 million from a single store.
The article also gave a glimpse into what kind of return a Starbucks location can generate for the owner, with sales to investment ratio sitting in the 2.3 to 1 ratio. That’s sales 2.3 times the initial investment within year 1, and sales typically improve in the following years generating even better returns. It’s no wonder that Starbucks’ are popping up off highway exits, inside hotels, and part of gas stations…this name brand addictive beverage thing is one heck of a business.
It’s fascinating to get a behind the scenes glimpse of something you see all the time, everyday, once in awhile..or at least I think. Check out the article.
