PEY and SPY Dividends

I just received my dividend payments for my holdings of PEY and SPY. I received $1.11 for the PEY and $1.27 for the SPY. Each of these dividends is being reinvested into the same holding. I received an additional .0692 shares of PEY and an additional .0085 shares of SPY. So here is a quick update on the status of my Roth IRA as of market close today 4/30/07:

• SPDRs S&P 500 Index ETF (SPY): 2.451 shares @ $148.29/share = $363.46
• iShares Russell 2000 Index ETF (IWM): 4.4241 shares @ $80.74/share = $357.20
• iShares Euro-Asia Index ETF (EFA): 4.6829 shares @ $79.16/share = $370.70
• Powershares High Yield Dividend ETF (PEY): 22.2434 shares @ $15.81/share = $351.67
• Money Market Fund: $30.69

Roth IRA Total: $1473.72

Taking Stock of April

April was a fairly good month for my investments. I contributed $330 to my Roth IRA this month, and I contributed an additional $330 to my emergency/summer savings fund on top of the Roth IRA. In my Roth IRA, I received a whopping $0.64 in money market dividends; and in my taxable account I received a $3.25 money market dividend for my savings fund, and a $0.91 dividend for my holdings of Advantage Energy Income Fund (AAV).

On top of all these transactions, the market has had an incredible upwards run over the past couple of weeks; so as a result my balances are looking pretty sweet right now. I have come to view upward trends with much trepidation, however. Not that I am too worried about a major market crash, especially with twenty to thirty years until my retirement. But I have come to love downward trends right at the beginning of the month when I make my Roth IRA contributions and ETF purchases {What is an ETF?}. Now with Dollar Cost Averaging, market timing is a less critical factor for my investment purchases, but it would still be nice to buy my ETFs when they are slightly lower priced rather than at the end of a bull run. But in any case, I plan to follow through with my long-term strategy and to plop down my Roth IRA contribution right at the beginning of the month, regardless of price.

So what does the future hold for next month? I am looking forward to seeing my first distribution payment for my Powershares High Yield Dividend ETF (PEY), and I should be receiving my first distribution for my S&P 500 Index ETF (SPY). In case you haven't figured it out, I personally find stock dividends to be the neatest thing since sliced bread. It is an amazing thing to watch my investments making money for me with no additional labor or effort on my part. And on top of that, when the dividends are reinvested back into the original security, the dividends will get progressively bigger over time. Even though I have only been an investor since January, I am already seeing the power of dividend reinvesting in action in my own distribution payments.

So next month will be business as usual, making contributions to my Roth IRA and to my emergency funds, and watching the dividends come rolling in. I am actually hoping for a downturn in the market soon, so I can get more investment shares for the same dollar amount. I just don't understand all the cheer-leading that takes place when the market is on an upward trend. Remember, folks, that the only time you want the market to be up is when you sell! (Thanks to The Dividend Guy for driving this point home for me.)

You Can't Please All The People All The Time

Many of you have heard the following quote by Abraham Lincoln and the common variations thereof:

"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time." - Abraham Lincoln

A common variation is the following:

"You can please all the people some of the time, and some of the people all the time, but you cannot please all the people all the time."

So I was teaching my 8:00 a.m. Intro to Logic course this morning when the second quote above hit me as a necessary truth. The scuttlebutt around my class is that students are finding the material too easy, so much so that they are finding the required discussion section to be a waste of time. Now, needless to say, I have little patience for an attitude such as this. You can certainly bet what would happen if I erred on the other extreme and made the class too hard for everyone to keep up with. So certainly there is a middle ground to be found between the two extremes of being too easy and being too hard.

I have been in logic courses in which the professor had erred on the side of being too rigorous and set the bar a little too high, so much so that the students were literally scrambling to make heads or tails of the material. This is perhaps the exact opposite of my teaching philosophy, in which I need to try to bring as many people on board as possible so that they can all achieve the high goal at the end of the course; especially in a logic course in which the material is so exhaustingly cumulative that once one falls behind it is nearly impossible to get caught up. Moreover, I think of logical reasoning as a skill rather than a piece of knowledge. Take any skill you like and it is something that one works slowly and methodically to develop, whether it is learning to build a house or learning to play the piano. Likewise, I would rather give the students a slow and steady entree into the world of logic (and see them all achieve more than a house of cards) than to overwhelm them with more than they can handle. I think somehow the students are convinced that they will remain unchallenged throughout the entire term. If they think that, then boy are they sorely mistaken!

So I had it in my mind to go in and lay down the law for them at our next class meeting, but then I thought of the house-building / piano-playing metaphor; and I figured that this might just convince them to take a proverbial chill-pill and go with the flow of the course. Again, you can please all the people some of the time, and some of the people all the time, but you cannot please all the people all the time.

The same is true of the investment world, by the way. A single glance at the Wall Street pundits on CNBC will illustrate this very principle. If the market goes up, then the arguing begins about which investments will make the most money the following day. (Don't even get me started on the foolishness of worrying about daily market fluctuations!) If the market goes down, then the pundits begin their arguing about how soon the next recession is right around the corner. It is enough to make the long-term investor's head spin with some combination of frustration and pity.

So what does one do in a trying situation like this, in which not everyone can be pleased all the time? Well, despite my best efforts at putting forward the contrary impression, I am actually rather thin-skinned when it comes to criticism; especially about my teaching, for which I am very passionate. In fact, I spent most of today with my figurative tail tucked between my figurative legs at the thought that my logic course was vastly unchallenging. But nonetheless, I have sat in (and not to mention taught) more logic courses than the students and the TAs combined, so I know I have an idea of what I am talking about regarding sound teaching methods for a logic course. So despite my semi-wounded pride, on Friday I am going to dust myself off, stand up tall, and give those students a run for their money.

The same is true for you investors out there. Don't let the brouhaha of the Wall Street world deter you from your well-thought-out investment strategy. You will encounter all sorts of critics that will make you rethink your strategy and/or your ability to achieve your financial goals. Stay the course and dust yourself back off. Keep funding those 401(k)'s and IRAs, pay yourself first, think long-term, and rejoice for the stocks that go on sale every time the market has a downturn. If anyone tells you otherwise, tell 'em the logic professor told you so!

Investment Metaphor #6: Live 24/7 Webcasting

The worship pastor at my church just posted a blog on an article he ran across about a new trend in ministry: pastors who are webcasting their lives 24/7 for the purpose of keeping themselves accountable to their congregations. I have very mixed thoughts on this trend, both in terms of its propriety in the ministry and in terms of its applicability to personal finance. I shall deal with the ministerial issues first, but feel free to skip down to the latter part of this post if you are interested only in the personal finance issues I will raise.

So what do we make of this idea as a model for personal accountability in ministry? I would first of all like to commend the pastors who are participating in this program for their desire to live lives that bear good fruit and that are free from hypocrisy. That being said, I have serious concerns about the motivation behind this idea. The immediate analogy that comes to mind is the ever-present eye of Big Brother in George Orwell's 1984 (purchase from Amazon.com). Rather than pursuing righteous behavior for its own sake, my concern is that 24/7 webcasting of a pastor's life may promote a concern for not getting caught with wrong behavior rather than pursuing right behavior for its own sake. I may be more of a Kantian in terms of ethics than I have previously realized, but it strikes me as obvious that doing the right thing so you won't get caught has less moral worth than doing the right thing for its own sake.

Another concern for the ministry I have about this plan is that the transparency of the video camera actually creates a barrier of distrust between a pastor and his/her congregation. If the congregation feels the need to check up on its pastor, my concern is that the congregation does not actually trust the pastor to be genuinely committed to Godly living. Also on that note, an essential feature of Christianity is the view that humans are sinful and imperfect beings by definition. This is the reason that Christ sacrificed himself for our sins, which we will end up committing because of the nature of our being, despite our best efforts at living better lives. It is an unreasonable expectation to have that our pastors are any less sinful than the rest of us: "...for all have sinned and fall short of the glory of God..." (Romans 3:23).

Accountability is fine and good, and that is part of the reason for regular fellowship with other Christians, but if we are looking for perfection in human behavior then we are likely to be incredibly disappointed in our pastors and in each other. We are all sinners, and that is the reason for the necessity of the forgiveness to be found in our Lord Jesus. Our God is a just God, but a loving and forgiving God. I worry that this webcam idea may inadvertently create an impression of a God similar to Orwell's Big Brother, ready to catch you in the act and bust you around every corner, rather than a God who hungers to forgive a repentant sinner.

Now, getting back to the personal finance issues, I wonder what impact it would have on our personal finances if every money decision we made were to be webcast live in real-time on the internet. Would we all make better finance decisions, or would we look for subtle ways to evade the gaze of the camera and splurge in private? (Same thought about the webcasting pastors. I have no doubt that they will still sin, but will they be seeking out ways to sin in private just off-camera?) Maybe blogging about personal finance is a subtle form of this same principle. We finance bloggers tell ourselves that we are being transparent about our finances for the purpose of accountability, but does this actually cause us to seek out more creative ways to cheat on ourselves and our financial plans in secret, away from the prying eyes of our readers?

I would love to hear any thoughts from you, my readers, on this issue; whether regarding ministry and Christianity or regarding transparency in personal finance. It is certainly a provocative proposal, in any case, but my hunch is that this idea calls for careful scrutiny. Part of my own belief requires that I not be judgmental towards others, as Christ forgives my own personal sins; so I do not intend to be judgmental toward those pastors who participate in this program with honorable intentions. But I believe this program as an institution can and should be scrutinized for its potential but unwitting promotion of dishonorable intentions among those who agree to 24/7 exposure to the world at large.


See prior entries in my series on investment metaphors here:

Investment Metaphor #5: Johann Sebastian Bach
Investment Metaphor #4: Investment Blogging
Investment Metaphor #3: Potatoes Revisited
Investment Metaphor #2: Fractals
Investment Metaphor #1: Cane Toads

And Payday Draws Near...

This past month I have tried a new saving strategy. If little things like going out less for coffee or fast food are the surgical strike method of saving cash, then my method is the carpet bombing method of saving for retirement. This month, rather than making my usual 10% contribution to my Roth IRA, I made more like a 20% contribution (pats self on back). This naturally has left me with less and less money throughout the course of this month, which has forced me into curbing my spending whether I wanted to or not. For example, last night I wanted badly to order a pizza; but I am riding the waves through the end of the month without being able to afford pizza. End result? No pizza, but my wife and I made a yummy pasta dish that was every bit as good as pizza at a fraction of the cost. Did I miss the pizza in the end? Not really. So don't be afraid to brute-force your way into saving money and investing for retirement. If you don't have the day-to-day willpower, just put yourself in a position in which you don't give yourself any option. It was remarkably successful this month for me. Nonetheless, I am really looking forward to payday in a week or so. I may just have to treat myself to that pizza after all, after I make my IRA contribution of course!

Money Pet Peeve: National Food Brands

Free Money Finance had a recent post about the Publix grocery chain offering a buy-one-get-one-free special, in which you would get a free store brand product along with a purchase of a national brand. This promotion is to try to convince buyers that their Publix branded products are every bit as good as national brand products. One of my biggest money pet peeves is the fact that people still waste money buying national brand products.

I asked my wife why this would be the case, and she said it had mainly to do with the packaging. Take a look at the above photo, for example. The Welch's juice bottle has a very pleasing photographic label, while the Publix brand is more monochromatic. This might lead to the unconscious impression that the premium packaging contains a higher quality product, which I have very seldom found to be the case.

When my wife and I do our grocery shopping, which we usually do in the middle of the night to avoid the big crowds, we usually pick up whatever products are the cheapest and will fulfill our needs. Safeway is our grocery store of choice, and their store brand is for the most part every bit as good as the national brand (plus Safeway offers online grocery shopping and delivery). There are only a couple of exceptions that I can think of, for which it is nice to have the genuine article. Here are a few products that come to mind, on which I don't mind spending just a little extra cash to get a product that makes me happy:

1) Crackers: I love Wheat Thins and Triscuits. Safeway makes a decent imitation of these crackers, but they just plain don't square up to the real thing.

2) Coca-Cola: This is more for my wife than for me. I would basically be content with generic Safeway soda (usually a six-pack for a dollar), but my wife is in love with Coca-Cola's diet black cherry vanilla coke. Much more expensive, but it is a unique flavor that to my knowledge no generic brand has tried to capture.

3) Herbs & Spices: Sometimes I will pick up a big package of generic Italian seasoning, but if I am doing any fancy cooking I like to pick up some premium spices that are a bit more flavorful and higher quality.

4) Charmin: This should be self-explanatory.

Other than these few items, we generally purchase the generic brand as long as the national brand product is not on sale for less than the generic (sometimes this is the case, so be sure to compare prices). If you are still purchasing national brand products, consider switching to generic products for the bulk of your needs. You will come home with a thicker wallet and you should be every bit as satisfied with the store brand products as with the national brands. Don't fall prey to deceptive advertising any longer!

(By the way, my wife is a former employee of Publix and she has nothing but good things to say about this company.)

Education Savings Accounts

My sister is pregnant with her and her husband's first baby. Her baby shower is tomorrow, so my wife and I are driving up to Sacramento for the baby shower tomorrow afternoon. Never having had a baby before, my sister naturally started a baby gift registry at a department store or two and registered for all sorts of cute but impractical baby paraphernalia. In an effort to be the practical counterpoint to my sister's impractical albeit enthusiastic baby shopping list, I have decided to start and fund an Education Savings Account (ESA) for my soon-to-be-nephew for my sister's shower gift. I believe that I will have to wait until my new nephew gets his social security number to start the account (somebody please correct me if I am wrong about this), but I am glad to be the voice of reason amongst so much estrogen-laden baby enthusiasm.

I realize that it is a relatively boring gift for a baby shower, but an ESA will be one of those gifts that is only highly appreciated after the fact. Plus it will make future gift giving incredibly easy, as we can just make an additional contribution to the account for birthdays, holidays, etc. I will be starting the account via Sharebuilder.com due to the $0 minimum balance requirement and the ease of setting up automatic investments in case my sister decides to make regular contributions to the account. I will probably just start the account with some money put into an S&P 500 Index ETF (e.g. SPY), since with eighteen years to grow the account will be able to weather the ups and downs of periodic market fluctuations without any trouble. And the initial investment should multiply considerably in the span of 18 years, given regular contributions, dividend reinvestment, and appreciation. This seems a much smarter idea to me than wasting (er...excuse me...ahem...*cough*..."spending"...) money on baby jumpsuits that will be outgrown in a matter of months.

Any thoughts from the peanut gallery? Boring new uncle or practical older role model? You be the judge!

New Capital One Credit Card

It may seem odd that I am excited about having a new credit card, especially since one of the themes of this blog is debt-reduction. But let me explain my situation. When I was younger I managed to rack up quite a sizable sum in credit card debt due to my using my credit card for food and books (more than a little of each) while I was in college. Fast forward a while and I was having a hard time keeping up with the payments, and my credit rating tanked. I managed to pay off one of my credit cards, a Chase Visa with a $2,000 balance. I was so behind on the payments, though, that the account was closed by Chase.

Similar story with my Citibank Master Card with a $5,000 balance, except that I had gone over the credit limit; the combination of over-limit fees and late fees managed to drive up the balance to nearly $8,000. Fast forward again: I called Citibank and asked if they could set me up on a payment plan, despite the fact that they, too, had closed my account for delinquency. They set me up on an awesome payment plan with absolutely zero interest. As long as I made the required automatic payments, the account would be paid off in five years. That was over a year and a half ago, and my balance has been dwindling steadily since!

Unfortunately the two closed accounts had left me without a major credit card, which I do like to have for emergencies (no fast food and no Amazon.com!). Getting to the present, I noticed that Capital One had been sending me credit card offers in the mail again for quite some time. It occurred to me that my year of on-time payments had probably raised my credit score a bit, so I decided to fill out an online application for a Capital One card, fully expecting for the application to be declined. Imagine my surprise yesterday, then, when I got an approval notice and a new Master Card in the mail with a $2,500 limit!

Now fortunately my credit sensibilities have progressed since my first credit go-around, so I am not worried about repeating the past with this new card. It is comforting to know that I have at least some credit in case of an emergency, and a chance to build my credit history somewhat anew after my previous credit fiasco. I had my $350 Sears credit card balance (with a nearly 30% interest rate! eek!) transferred to the new card, which has its interest waived until October. So hopefully I will be able to get that balance paid off before October. I am contemplating doing the credit card freeze that my wife has done in the past, just to be on the safe side. (See an an example of this technique over at Dual Income No Kids.)

On a tangential note, I think it is just criminal how credit card companies prey on college students in their late teens and early twenties. Don't misunderstand me, I am a humongous fan of personal responsibility when it comes to life decisions, but at that age the majority of college students have no idea how much trouble they are likely to get into just from being their age. And by the time they do realize the error of their ways, it is probably too late and they will have some serious credit repair work to do. I'm not sure I have a good solution to this problem, but the contributing factors are pretty easy to isolate: credit card companies with questionable business ethics, the colleges for permitting these credit card companies to proselytize their students, public schools for failing to promote a sound financial education as part of high-school curriculum, and parents for not smacking down their kids' lofty credit ambitions the second they find out about them! Yes, the kids are adults at that point, but they are really just not ready to handle the responsibility of a Platinum credit card at nineteen years old, adults or not.

By the way, I made sure to choose the Capital One card without a fancy photographic background image (a seductively tantalizing and deceptive sales technique on Capital One's part), so I won't be tempted to whip out my card to show off a cutesy logo and subsequently use the card unnecessarily. While the card backgrounds that were available were actually quite aesthetic, this is nothing other than a blatant attempt to sucker someone into using credit based on cuteness and vanity (e.g. "choose the card that reflects your unique personality") Oh, puh-leeeaaase! When did we all lose our sense of individuality, such that we need personalized credit cards to validate our uniqueness? People who fall for this obviously did not watch the movie "Fight Club". We may not need "Project Mayhem," but I wouldn't mind slightly more ethical business practices on the part of credit card companies. If you have not seen this film, then this is your SeeMeGetRich.com homework assignment for the weekend. There will be a quiz on Monday.

Scratch Ohio

Well, my wife heard back today about the buyer position she had interviewed for last week. Unfortunately, she did not get the job, so we are back to square one in terms of what the next year will bring and where we will live. We desperately need to get out of the central coast in CA, but that is only practical if we have jobs to go to! I have thought seriously about ditching the teaching gig in favor of a more traditional (i.e. more reliable) job, especially since the adjunct teaching work is getting harder to come by where I'm at now. My former boss from Radio Shack is up for a senior loss prevention auditor position with T-Mobile up in Seattle, WA. If he gets that job, I have thought about trying to find my way into that company also, since I have at least a general familiarity with the telecommunications industry. Teaching is very rewarding, but not so much so that I couldn't take it or leave it.

Anyways, my wife is fairly disappointed that she did not get the job in Ohio, even if she never managed to get her hopes up much beyond a realistic level. Now we have to put our thinking caps on and formulate a new game plan. She has not ruled out applying for the position again next year, especially if she can get some feedback from her interviewer on how she could improve to have a better chance next year; but she may just throw in the towel on that idea if something better comes along. So please keep us in your prayers, everyone. We are definitely at a turning point, and the unknown future is weighing heavily on our shoulders today!

Advantage Energy Income Fund: March Dividend

Last night I received my second dividend payment for Advantage Energy Income Fund (AAV) since my initial purchase in late January of this year. My initial purchase was for eight shares even. My first dividend payment ($0.87) added another 0.088 shares to my total last month, and this payment ($0.91) added another 0.0865 shares to that. So now I own a total of 8.1745 shares of AAV. The initial eight shares that I bought were priced at something like $10.86/share, and currently AAV is trading at $11.17/share. I am hoping this goes up somewhat, since Canroys (Canadian Royalty Trusts) have been beat up over the past several months and I purchased fairly near what looks to be the low price point for this security.

Like I said before in a previous post, I really had no idea what I was doing when I bought AAV since it was my first stock purchase and I was just excited to be buying any stock at all. But maybe this one will turn out to be good a good one in the long run (almost anything is). In any case, I'm not really worried about it, but it sure is fun to see those dividends payments come rolling in every month and to see them increase every time! The same will be true of the Powershares High Yield Dividend ETF (PEY) that I just bought this month for my Roth IRA. I'm anxiously awaiting the monthly dividend payments to begin on that one also.

Five Guilty Pleasures I Don't Mind Wasting Money On

My friend George came to visit us this weekend. George and I go way back and are long-time cigar buddies. Unfortunately, fine cigars are not high on the list of ways to be frugal with one's money! But it got me thinking about other ways I spend money and which of those ways might be excessive but justifiable in a cost-benefit sense. I came up with a top-five list of my guilty pleasures that I don't mind wasting/spending money on. I am preaching to the choir when I rave about investing and saving, but a life that is constantly deferred until retirement is no life at all. I suggest, if you have not already done so, to make a list of just a few guilty pleasures that you will treat yourself to in moderation without regret. The key is to treat yourself in moderation, so you are responsible with your money but still have a chance to enjoy the things you enjoy. Every person's list will be different, naturally; so if you don't mind sharing your list, go ahead and leave your list in the comment section to share with other readers. It will be in interesting lesson in human diversity, I am sure!

Here are my top five guilty pleasures, in no particular order:

1) Cigars: While I have never been a cigarette smoker, I was hooked onto cigars at the age of sixteen by my friend and former coffee shop boss/owner John. John always kept a stack of Cigar Aficionado magazines on our bookshelves at the caffe. I was completely taken in by the high class imagery associated with cigars. One day after work John took me to the local cigar shop and bought me my first cigar, a Hemingway Classic by Arturo Fuente. I have been a cigar aficionado ever since; and although I have tried many different cigars since that first cigar, my favorite is still the Hemingway series by Fuente due to its consistency and its robust but smooth flavor. I must admit that indulged in a Hemingway this weekend over coffee with George, who used to work in the cigar industry and remains my cigar mentor of sorts.

2) Star Trek DVDs: I have what is perhaps an even greater love of Star Trek than I have for cigars. Star Trek: The Next Generation will always be my favorite iteration of the Star Trek franchise, followed closely by Star Trek: Voyager and The Original Series. When I got my first teaching job, I had more money than I had ever really had, and I went on a Star Trek shopping spree. Within a couple of months, I had purchased the boxed set of Star Trek: The Next Generation episodes, the boxed set of The Original Series episodes, several seasons of Voyager, and all ten Star Trek movies to date. Now this might seem like foolish spending to a majority of my readers, but the DVDs will last a very long time, and the many years of pleasure I receive from being able to tag along with the crew of the Enterprise at the touch of a button is certainly worth the thousand dollars or so the DVD collection has cost so far. Yes that thousand dollars could have padded my IRA if I had been interested in investing back then, but now that I have the DVDs I am glad I bought them and will not feel guilty splurging once in a while to complete my collection.

3) Video Games: I by no means consider myself to be a "gamer" in the obsessive compulsive sense of the term. I am incredibly selective in my video game choices, and there have only been a couple of games in the past several years that I have really enjoyed. I am currently immersed in the three dimensional environment known as World of Warcraft. It is a classic role playing adventure game with Orcs, Trolls, Elves, etc. and all the combat and magic that one could want. As a Christian I find these notions silly but harmless as long as one views them in their proper light as fiction. (Some people take this stuff to a whole new degree of seriousness. I just don't get it.) I have spent a total of $60 or so for the game itself and the Burning Crusade expansion pack, and an additional $14.95 per month for the online service. I play online with Joe, my former boss from Radio Shack, and spend many happy hours doing quests and generally saving the virtual world. We can talk while playing using voice over the internet, and it is a great way to hang out with people who live far away and whom I can't see regularly in person. The other game I have loved is Halo 2 for the Xbox, and I am anxiously awaiting the release of Halo 3 for the Xbox 360. Again, the cost is justifiable for me, given how infrequently I purchase new game equipment and the many hours of consequently cost-free enjoyment I have after the initial investment.

4) My Pets: I am a pet person. Period. We currently have one cat, Peaches (the smartest cat in the world!), two mice, and one goldfish. Pets can be quite a significant money drain. Aside from maintenance costs such as food, litter, etc., there are also expenses such as vet bills and medications if needed. Last summer our cat Peaches picked up some fleas and nearly died from anemia that was caused by a parasite that lives on fleas (a parasite living on a parasite! hmmm.). It cost us almost a thousand dollars to get him treated after the blood work, medications, etc. to get him back in tip-top shape. My mother-in-law still thinks that we should just have had him put to sleep, even though he was only three years old at the time, and especially since we had to finance the vet bill using their emergency credit line (high interest! yikes!). I find this attitude heartless and callous. Our pets are are family and there is very little I would not do for them to make their lives as long and happy as is possible, regardless of the cost. Plus, pets can be just plain entertaining. Don't even get me started on hamster tubes! Expensive but entertaining as can be! And if/when we move to Ohio and buy a house, we plan on getting a pet Beagle or two (I will, of course, have to name mine "Reagle." Kudos to you if you caught the reference.) And yes, the two pictures at right are of our beloved Peaches!

5) Camping: My wife and I, along with my friend George and my cousin Jeff, take an annual camping trip. My traditional spot is Tuolumne Meadows in Yosemite's high country, while Jeff prefers Lassen Volcanic National Park. Wherever we go, this is our big chance to get away from all the stress, hassle, and chaos of daily life, and to commune with the beauty of God's creations while being earthy-crunchy. Fishing is definitely on the agenda, as is hiking up big mountains and awesome camp cooking. This is such a crucial part of my psyche that I have no reservations whatsoever about plopping down a little cash for our yearly camping trip.

So there you have it, folks. That is my top-five list of guilt-free guilty pleasures. Each of these in moderation contributes to my overall well-being and happiness, and hopefully you also allow yourself the occasional indulgence to remind you of the importance of enjoying the journey on the way to your financial goals. Go ahead and post your list, if you like, in the comments section below. I'd get a kick out of seeing what other people indulge in for their own guilty-pleasures.

Dumpster Diving for Fun and Profit

The recent post on dumpster diving over at The Bizarro World Debt Elimination Freak Show got me thinking about my old dumpster diving days in time past. In the summer of 2002 I was back home for the summer from grad school at Syracuse University. I needed to save some money because I was to be moving to my present town in the fall and I would need some cash for a security deposit and first month's rent on an apartment in a way overpriced location. I looked around at local jobs, but nothing sounded like much fun at the time. My mom made the suggestion that I do some work for her fiance, Robert, who was basically a local jack-of-all-trades handyman. He agreed pay me $10.00/hr., and the two of us would be able to crank out quite a bit of work together.

One of Robert's long-time hobbies/passions was and is dumpster diving. So whenever we were short on work, we would make the rounds to all the construction sites, shopping centers, etc., raiding the dumpsters for anything that was remotely sell-able. Most of the time we were looking for scrap metal, especially aluminum and copper, which we could then drive over to the Alcoa (AA) scrap yard and sell for the going rate on scrap metals. Pure copper or aluminum caught the highest rate, but "dirty" copper or aluminum was also able to be sold on the cheap.

One of our regular stops was at the local "Big-Box-store" dumpster. This particular Big-Box was having a peculiar problem: Their forklift driver had a habit of punching holes in some of the boxed items they sold. Rather than sell a damaged product, Big-Box would just toss it in the dumpster and leave it ripe for the picking. One particular product that we found pretty regularly was a certain model of Rubbermaid snap-together outdoor storage shed; the kind that goes for a few hundred dollars a pop. (See the exact model here and in the photo above. Ahhh, the memories!) The forklift driver was punching a hole in the box and damaging the doors of the shed. Whenever we found one of these sheds in the dumpster, we would make off with it like bandits, run it back to Robert's garage, assemble it, replace the missing door with gray-painted plywood, and put it out on the street with a for sale sign.

The whole process probably took under two hours, and we would be able to net somewhere between $150 and $200 for each shed we recovered. $75-$100 for each of us per shed was not a bad deal for two hours of work. By the end of summer we had the storage shed assembly down to a science and we were able to shave another half hour off that assembly time. We probably found, assembled and sold somewhere between seven and ten identical sheds all with the same missing door over the course of that summer.

The next summer a similar situation arose. My then-girlfriend and now-wife had become engaged, and I needed to save money for our honeymoon. We were to be married in August in her hometown in Florida and then we were to drive across country for our honeymoon and to get her moved out to California while I worked on my Ph.D. Same thing: I needed the cash, but a regular job didn't sound like much fun at all; so Robert and I were back to our old tricks of odd-job work and construction, with a healthy dose of dumpster diving when the work wasn't forthcoming.

So all-in-all I have two summers of professional dumpster diving experience under my belt. As long as we avoided the dumpsters with heavy-food content (yuck!) and stuck to those dumpsters that tended to yield sell-able materials (construction sites, stores, etc.), we were able to make pretty decent money while avoiding the ick-factor that is usually associated with dumpster-diving.

I wonder what my students would think if they knew that their college professor moonlights as a professional dumpster diver! Lesson in short: when you need the cash, you can't be proud. Swallow your pride, find a good dumpster, and dive right in! I had a better time dumpster diving than I have had at practically every job I've had before or since. I have always had relatively fun jobs (coffee shop barista, RadioShack salesperson, college professor, etc.), but running around in a pickup truck all day with a toolbox and a bed full of scrap metal was more existentially freeing than any of them!

RSS Feeds are Neat

Within the past few days, I have discovered the value and efficiency of reading blogs via RSS feeds through a reader such as that offered by Google. It is wonderful to be able to have all the blogs I am interested in compiled into one place so I'm not wading through endless bookmarks or web pages trying to read through all my favorite blogs. I am really surprised that I hadn't discovered this before, but I am still relatively new to the personal finance blogging community and pretty much stumbled upon RSS feeds by accident.

If you haven't already done so, please take a moment to subscribe to SeeMeGetRich.com via one of the readers below. My favorite is the Google Reader (), but I have also been an avid user of My Yahoo () in the past, even before I knew that I could add blogs to My Yahoo homepage.

For those of you who are new to RSS feeds and blog subsriptions like I am, this symbol () is a button that will link you to a website's or blog's RSS feed which can then be viewed inside the reader of your choice. If you are a fellow blogger and have not done so, your blog hosting site should have some way for you to access and link to your RSS feed so others can subscribe to your blog. You can also visit Feedburner.com to get up and running.

If you would like to subscribe to SeeMeGetRich.com, please feel free to do so via one of the readers below. You will find that it will greatly enhance your experience with my blog in particular and with blogging in general.


Add SeeMeGetRich.com to any of the following blog readers:

If you are already a subscriber, or even just a faithful reader, I just want to thank you for visiting my blog. It has been an exceptionally long week for me, so I'm going to go out and smoke cigars with my good friend George today and try to get my energy back up. Energy for blogging, energy for investing, energy for studying, and energy for life!

Investment Metaphor #5: Johann Sebastian Bach

Charles E. Kirk, over at The Kirk Report, has an excellent archive of lazy portfolios collected from around the internet. A lazy portfolio is simply an investing portfolio consisting of a small handful of Exchange Traded Funds, or perhaps mutual funds, that one buys and holds for the long-term. Often a Dollar-Cost Averaging system is employed to enable one to invest consistently and regularly without running the risks of trying to time the market.

When I first decided to begin investing in a Roth IRA, I was quite overwhelmed by sample portfolios such as the ones listed on the Kirk Report. What were the differences between them, and what were the risks if I accidentally invested in the wrong portfolio? Two thoughts then occurred to me. First, making sound personal finance decisions has little or nothing to do with which investments one chooses. And second, although there are many differences from sample portfolio to sample portfolio, there is a great deal of overlap and many similarities between the various portfolio models.

Personal finance is a matter of living within one's means and forming the habits of saving and investing in general. The differences between the average millionaires are just not that great. Nearly every one of them has been successful in curbing how much money flows out and investing the rest in investments that will put that money to work via growth and compounding. Some invest in real estate, while others invest in the stock market. The individual investment choice does not matter so much as being consistent in one's long-term investment strategy. The exception are those who either put all their eggs in one basket due to a lack of proper asset diversification or treat the stock market like a Roulette Wheel hoping to hit the jackpot with the next big stock pick (and often times end up losing their shirts in the process).

Getting back to the lazy portfolios, there is an amazing symmetry and a similarity to the various portfolios listed on The Kirk Report's lazy portfolio archive. Almost all of the portfolios have some exposure to three basic areas: a broad market index such as the Vanguard Total Market Index or the SPDR's S&P 500 Index, a small-cap index such as the Russell 2000, and some form of exposure to an emerging market index. Like a good Bach fugue, what I began to notice were merely variations on a common theme. The ratios between these basic asset classes differed from portfolio to portfolio, and sometimes these basic asset classes were supplemented with other holdings. But in any case, the question shifted from "Will I retire rich at all?" to "Exactly how rich will I retire?" simply by changing one's outlook on money from a earn-and-spend model to a save, invest, buy and hold model. This was not a function of which portfolio to adopt but it was a function of changing one's basic assumptions about how money operates and what it is for.

It can safely be assumed that any of these portfolios will lead to a sound retirement as long as they are begun early enough in life for substantial compounding to take place. Not to be too simplistic with my faithful readers, but it just plain does not matter which strategy you use when there is a broad brush stroke difference between retiring with nothing (which is akin to not retiring at all!) or retiring with a nest egg that will provide for your final years.

So if you are reading this post and have yet to take the plunge into investing, I would encourage you to see past the differences in investing approaches and look for the essential features of a good investment strategy. Which strategy you adopt matters less than the fact that you adopt some long term strategy in general. If you like mutual funds due to their active management style and lack of brokerage fees, dive right in. If Exchange Traded Funds are your deal because of the lower expense ratios, don't be shy. If you like watching the dividends roll in, pick some good blue-chip dividend stocks and get set up on a dividend reinvestment plan. Just get started rather than fret about which strategy will work best. It really is hard to mess up a buy-and-hold investment strategy as long as you cover the basic asset classes and don't put all your eggs in any one basket.

The endless debate about which strategy will best "beat the market" begins to look like an argument about so many minutiae. Sure it gives us finance bloggers something to write and debate with each other about, but in the end that extra percentage point you might earn from having a perfectly tweaked investment portfolio will just determine exactly how rich you are going to be, not whether you will be rich at all. In any case, you will be far better off than those without the good sense to plan for their futures.


See my previous investment metaphors here:

Investment Metaphor #4: Investment Blogging
Investment Metaphor #3: Potatoes
Investment Metaphor #2: Fractals
Investment Metaphor #1: Cane Toads

Flat Tires and Emergency Funds

I got a flat tire today while on my way up the hill to teach my 8:00 a.m. Intro to Logic class at the university. Fortunately I managed to make it to the parking lot at the university before the car really became un-drivable. As all my friends are well aware, I am nothing of a morning person. Because of this (or maybe despite this), I actually give myself lots of extra time to get to work in the morning so I have a chance to wake up and get a cup of coffee before class. This morning I had an extra 45 minutes or so before class was supposed to begin, so I figured I would just change my tire before class and I would be able to zip over to the tire store afterwards to get the tire fixed or replaced as need be. I would just have to teach class looking like a mechanic. No big deal.

The changing of the tire went flawlessly. Despite being a relatively bookish academic, I am still pretty earthy-crunchy like that. I cranked the car down, only to discover that the spare tire was just as flat as the main tire! (It can be hard to tell on a spare tire, because it feels fairly firm even when low on air.) At this point I had brake dust all over my teaching clothes, but once I decided to change the tire myself I had accepted the fact that I would just be showing up to class with brake dust all over myself. This was not an exaggeration. I am notoriously bad at staying clean while doing physical work. So I got to class at 8:00 and I apologized to the students for being dirty for class, and they were fairly impressed that a geeky-trendy professor like me would be hands-on enough to change his own tire (trust me, the professor image is just a facade!).

I was supposed to hold office hours after class, but I canceled them so I could call AAA and get my car towed to a tire store after class. Now I didn't really have the money in my budget to spend on a new tire since I was so generous to myself by making large contributions to my Roth IRA and to my summer savings fund this month, but I needed a tire no matter what and I was prepared to pay for one if the flat could not be patched up. Waiting at the local donut shop for my tire to be fixed, I got started thinking about how I would have paid for the tire if I didn't have some money already stashed away for summer. I would either have to borrow some cash from my wife or have to raid my Roth IRA (seriously off-limits).

Luckily I had been trying to establish my summer savings fund due to my tenuous job-prospects this summer. It appeared that this fund would have to moonlight as my emergency fund this morning if I needed to buy a tire, and I was glad that I had had the wherewithal to put some money in a regular old money market fund in addition to my Roth IRA.

So after an hour and a half of waiting at the local donut shop and several delightful Friday morning chats with the patrons, I got a call from the tire shop that my car was ready and that they were able to patch the tire after all. Whew! Fortunately my summer savings could go unscathed, seeing as the bill came to a whopping $15.00 for the tire patch. But I got a valuable lesson this morning in the virtues of keeping some cash aside in an emergency fund, despite my overwhelming desire to take that money and dump it into my Roth IRA portfolio instead. Had I not had some extra cash handy, and had the tire not been fixable, I would have had a very different story to tell today about having pilfered from my Roth IRA to fix a spare tire. Now that would have been stupid of me indeed!

Personal Tax Earmarking (a.k.a. How to Love Big Brother)

A reader, Lindsay, sent me a link to this article on "Personal Tax Earmarking," which is a system that would allow taxpayers individually to decide how to allocate their tax dollars on a first-come-first-serve basis to government programs of their choice. The author claims that this system would have a number of benefits both to individual taxpayers and to the government. For taxpayers, this system would promote a citizenry that would be more informed about the inner workings of our country's budget, and it would "allow taxpayers to take more personal ownership of the workings of the government." As for advantages to the government, the author claims that a personal tax earmarking system would encourage citizens to file their taxes early (due to the first-come-first-serve nature of the allocation process). In addition, this system would reduce the tax gap while improving taxpayers' attitudes towards paying taxes to the government.

I must admit, I am greatly skeptical of the value of a system like that described in this article. I think history demonstrates that no one ever really likes to pay taxes, even if those taxes are going to a good cause and even under full disclosure to, and control of, the average citizen. I have never once heard anyone utter the phrase, "Gee, I'm glad that I got to pay taxes this year." True, this process might make paying taxes more entertaining, but there is still the pill of taxes hidden inside all this jam.

Moreover, this program would not have that significant of an impact on the country's budget as a whole. Money would still be allocated on the broad scale by congress. Yes, citizens would be able to decide which pot their money goes into, but the total amount in each pot would remain the same when all is said and done. This would not have a significant enough practical value to justify the cost of implementing and maintaining such a complicated system of money allocation. This program is just extremely unnecessary to the money getting where it needs to go, and I find the benefits mentioned in the article mainly to be sugar-coated disguises for the high taxes already paid by taxpayers.

Taxes may be necessary, but we should be skeptical of any government program that tries to make paying money to the government out to be a pleasure rather than a necessary evil. Since everyone knows how fond I am of metaphors, here is one for you. The very last line of George Orwell's 1984 is just a bit too similar to this proposed tax system for my taste and political te