Personal Finance Rules: Build Strong Relationships

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strong-relationships

Strong Relationships

Inspired by The Simple Dollar, I’m doing a series on personal finance rules and have previously talked about: Spend Less Than You Earn, Keep it Simple Stupid, Pay Per Hour Worked, and Ignore Professional Stock Pickers.

Today is how you (and me too) should build strong relationships. Over at The Simple Dollar it is rule #19 and they offer some helpful reasons why you would want to do this. I’ll add my own thoughts to the mix.

Here in Korea, as an expat and without any “family,” it is especially important to build strong relationships with those who live near to you because for things that you’d normally ask your family to help you with, you have to rely on your friends. My fabulous friends have done amazing things including hosting holiday dinners (Christmas, Thanksgiving, etc), celebrating birthdays, helping me move, looking after my cats when I’m on vacation, supporting me when I was sad about something, giving advice about future plans and planning holiday trips. And I’ve done the same for a lot of people too.

So what am I saying? Life is better when you have strong relationships with those around you. You can then count on them for the times when you need a bit of help, and you can also feel good about your life when you are able to help out others in their time of need. It’s pretty fabulous to ask a friend to look after your cats and know that they’ll love them as much as you do. Or, borrow something from a friend instead of having to buy it yourself. Or, spend a big holiday with good friends instead of being sad about not being home with your family. Or, have someone to check on your house when you’re away instead of worrying about it. It just makes sense to have a strong network of people around you, on a lot of levels.

Top 3 Reasons to Ignore Professional Stock Pickers

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Jim Cramer-Mad Money

I continue on with a series on personal finance rules inspired by this post over at The Simple Dollar. The first three parts in this series were: Keep It Simple Stupid, Spend Less Than You Earn, and Pay Per Hour Worked in case you missed them.

Today, some good advice from The Simple Dollar, which is to ignore professional stock pickers. You know, the ones you see on TV (Jim Cramer at Mad Money) and all over the print media world giving their “inside information” about which stocks are going to be hot for the coming year.

Here are my top 3 reasons for why you should ignore professional stock pickers:

1. It’s too late. Once it’s all over the news, the time in no longer prime because everyone and their uncle has gotten in, forcing the stock price up and it’s no longer the ultimate pick, that it once (or ever?!) was.

2. Interests are conflicted. Those stock pickers often hold shares in the companies that they mention and want to create an artificial demand for the stock, forcing the price up, at which point they will probably take profits and sell, leaving you: the chump buying a stock that is too expensive.

3. Things happen too fast. I like making slow, thoughtful decisions so acting hastily on some tip I see on TV just isn’t my style, nor should it be yours. The best decisions you can make when investing are well thought-out and careful.

So where does that leave us if we ignore the professional stock pickers? Investing like a grandma in dividend paying stocks, or broad market ETFs. Both are pretty great options, if you ask me.

Pay Per Hour Worked

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Pay Per Hour Worked

Today I’m continuing with my series on personal finance tips, inspired by this post over at The Simple Dollar: 60 Simple Rules of Personal Finance.

I’ve already talked about keeping it simple and spending less than you earn. Today, it’s all about knowing what your pay per hour worked is. This has been on my mind lately for 2 reasons:

1. I’m writing a book called, “The Wealthy English Teacher” and there’s a chapter about finding the best job. I recommend that instead of just looking for one with the highest salary, salary per hour worked is a better model because a high salary often comes with a massive number of teaching hours, leaving no time for side-gigs. Instead, a low number of teaching hours but a decent amount of pay could be a much better option.

Pay per hour worked can also be helpful if you are thinking about changing jobs or careers. What at first glance may seem like a poor financial decision might not actually be the case if you can reduce work-related expenses or you can spend a lot less time doing it. Your time is worth something!




 

2. It’s kind of related to the cost per use model, just in reverse which I’m a huge advocate of when making big purchases. Out of all the things that I espouse on this blog, the cost per use thing is what my friends seem to have latched on and they bring it up all the time.

Anyway, over at The Simple Dollar, they recommend taking your salary after tax, and subtracting all work related expenses you pay out of your own pocket including commuting, work related meals, etc. and then dividing that number by the number of total hours worked (including hours worked at home). That is your true wage. I have a feeling that a lot of people might be surprised to discover how low it really is, especially if you put in a lot of time at night or on weekends and during “vacation.”

 

Top 5 Ways to: Keep it Simple, Stupid

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Inspired by a post, 60 Rules of Personal Finance over at The Simple Dollar, I’m continuing my own series of personal finance rules to live by. The first rule I talked about was: “Spend Less Than You Earn” and this one is, “Keep It Simple, Stupid” (the KISS principle). Here are my top 5 ways to do that:

1. Automate Bills and Investments. Paying the bills and contributing money to retirement and savings accounts can be a bit of a daunting task, especially if you’re not the most organized person around. You can automate almost all of these things quite easily. But, of course you shouldn’t give automatic access to your accounts to just anyone-only reputable companies.

2. Investments-simplify and consolidate. Try to do all your investments through one single brokerage account. If you have multiple accounts, inquire about transferring everything into one. If you go with individual stocks, a portfolio of around 20 is enough, or with ETFs, 2-5 is good.

3. Reduce Choices. Choices can be overwhelming. Simplify and automate the things that aren’t really that important so you have more brainpower for the stuff that is. For example, things like what you wear, board games that you play, and what you eat for breakfast can all be reduced down to 1 (breakfast) or 3-4 choices (board games/clothes) so that you have more energy for choices related to investments, relationships or your career.

4. Implement a 3 Month “Cooling Off” Period. It can be helpful to push decisions about big purchases (over $500 perhaps) down the road three months and see what you think about it then. It reduces the frantic here and now, and pressure to make an immediate decision about something. During those three months, talk to a few people, do a bit of research on the Internet, and think about it a bit in some down time. You’ll often find that you don’t even want that thing three months later and your life is simpler!

5. Separate Accounts for Different Things. It is usually quite simple to have different accounts for different things and to automate this. For example, if you are saving up money for a new car, simply transfer some money from your main account automatically to the car account after payday. When you have enough money in the account for the car, buy it.

 

Spend Less Than You Earn

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I ran across this article, 60 Simple Rules of Personal Finance over at The Simple Dollar the other day and thought I would do a series, talking about some of my favorite points.

Spend Less Than You Earn

This is probably my favorite personal finance tip of all time and if you do only this, and nothing else for your entire life, you’ll probably retire rich, or at least comfortably. I’m currently writing a book about personal finance for English teachers abroad and this is the maxim that the entire book is based upon and the point that I keep coming back to, again and again.

How to do this in your actual life? I have a few tips for you:

1. Pay off all debt that you currently have, as fast as possible and do not accumulate more.

2. If you want to buy/consume something, save up for it. Cars, vacations, electronics, education. The only exception to this is a house, but you should make sure you put down a sizable down-payment.

3. Don’t compare yourself to others. Maybe all your friends and neighbors are driving flashy cars. Who cares….maybe they went into $100 000 of debt to be able to do that, which is just financial suicide. Thriftiness is trendy these days anyways, isn’t it?

4. Even if you get a raise at work, don’t inflate your lifestyle to that full extent. Sure, take a bit nicer vacation to celebrate or buy a car that you couldn’t have afforded 10 years previously, but don’t spend every last cent of that raise before it even hits your bank account. Continue to live frugally, at least in some areas of your life.

5. Compound interest. Remember that it is a powerful force which can either make your rich, or poor. Make it work for you by spending less than you earn, always, no matter what.

January 2015 Passive Income Report

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Better late than never! I was traveling around Vietnam for the past few weeks and wanted to take a technology break, which is why this report is only happening in the middle of February.

I earned a total of $272.92 this month-for all the details you can check out: January 2015 Passive Income Report. While not a huge number, I’m pretty optimistic about it for the following reasons:

1. Ebook sales of How to Get a University Job in South Korea: The English Teaching Job of Your Dreams reached almost $50. This is the ultimate source of passive income because although it is a lot of work to write a book, it requires no maintenance whatsoever, like a website or HubPages would.

2. Iherb is holding slow and steady at around $10-20/month. The most work I do for this is tell a friend or two about it and occasionally post about a shipping deal or something on my Facebook wall, so it’s for sure another passive income winner.

3. My email list. Not in the report, but something I’m happy about it is my email list. I put up a bunch of links/sign-up forms on my various online sites and while I was on vacation, I kept getting emails about new sign-ups. The first newsletter is coming soon!

Compared to previous years:

Jan 2014: $178.56
Jan 2013: $468.71
Jan 2012: $334.42

Multiple Domains One Host

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Ask Pat Podcast

Anyone who is trying to build passive income streams I’m sure has heard of Pat Flynn over at Smart Passive Income. Not only does he have extremely helpful information, but he seems like one of the nicest guys around. I was listening to his podcast Ask Pat, episode #259 while I was out hiking yesterday and I came across a piece of information that was ground-breaking for me. Maybe most people knew this already, but I truly did not.

Multiple Domains One Host

The thing I learned was that you could have one hosting account but use multiple domains with it. For example, I used GoDaddy to host my other site, Jackie Bolen as well as register the domain name (jackiebolen.com). Hosting is around $70/year and the domain is about $15, but there are plenty of special offers if you get both at the same time and use coupon codes, etc.

I wanted to get some additional domains for my Ebooks, but I thought I’d need a separate hosting account, which would have been quite expensive. BUT…I could use the hosting account I had already and run additional domains (like University Jobs Korea) through it and just have to pay the $15/year for the domain. It took a wee bit of googling and minor frustration to figure out how to link them together but it wasn’t that hard. Pat said that as long as your don’t have a ton of traffic on your sites, it’s all good and not a bad way to get started for cheap.

Taking Over the World, One Website at a Time

Anyway, if you want to take over the Internet and build yourself an empire of sorts for not a lot of money, check out GoDaddy:

15% off your first purchase at GoDaddy

Respect the $10- It’s how you can become rich

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mr money mustache

Mr. Money Mustache

Thanks Mr. Money Mustache

I was just over at Mr Money Mustache and was reading this article, “A Millionaire is Made 10 Bucks at a Time” and felt inspired to post.

The Quick Summary

Basically, the article talked about how we seem to have lost respect for the $10 bill and that we don’t actually think of it as that much money. We just spend it without even thinking about it, but it can actually buy you a good amount of useful stuff such as a whole big jug of milk or a massive bag of rolled oats. But, people become rich by thinking about the small stuff and whether to spend that $10, or not.

Long-Distance Backpacking, Ounces=Pounds

Not that I didn’t know this already, but it’s sometimes easy to forget that cents=dollars=$10 bills=$100 bills=rich.

Just like I when I hiked the Appalachian Trail (or trial as I more commonly refer to it) and my mantra was that ounces=pounds since I was an Ultra-Lighter. Even though little gadget A, or cool toy B were only 5 or 6 ounces each, if you have enough of them they start to equal pounds, and you’re no longer an ultra-lighter.

Conversely, cutting off the extra straps from your pack, or sawing down the toothbrush handle, or using soda bottles instead of Nalgenes only saves fractions of an ounce in some cases, it can add up to pounds when put together.

Frugal Living-Dedication is Required

Now, I’m just as guilty as the next person for spending that $10 bill thoughtlessly. A taxi ride here, a cup of coffee and a sandwich at Starbucks, a meal out when I have food in my fridge, leftovers that get thrown away, driving instead of walking. Back on the frugal living plan for me, that’s all I have to say. $10 matters! Maybe it needs to become my new mantra.

Update Public Profiles

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I Was Shocked to Discover…

In my recent effort to focus more on quality over quantity in my Internet ventures, one of the things I did was to spend a few hours and update all my public profiles to have some sort of cohesive message. In some cases, like on Blogger and HubPages, I had stuff from years ago that didn’t really make sense anymore. Even more disturbing was the fact that both of these places had not insignificant numbers of profile views. Anyway, onwards and upwards and I’ve learned that I really shouldn’t have underestimated the opportunity of these things to promote my brand and help people connect with me via social media.

It’s also helpful to have updated profiles when making comments on other people’s blogs because people really do click on them to see who they’re talking to.

Public Profiles Updated:

Blogger Profile
About Jackie Bolen on jackiebolen.com
WordPress-Gravatar Profile
HubPages Profile
Pinterest Profile

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