I went out to dinner last night with one of my coworkers (who I met two days ago for the first time) and we were talking about work, family, and other things that people who don’t really know each other that well talk about. As we were walking back to the hotel we are staying at, he asked me if I’ve started buying gold or silver due to the economic uncertainty in America.

My response. “No.” I wish I would have bought Gold four or five years ago, but I’m personally not convinced it’s a good buy right now (bubble anyone?). The conversation snowballed as we talked about our investment portfolios and the future of America.

My favorite thing about personal finance is that there are a million different ways people can manage their money. Unlike a snuggie, personal finance is not a “one size fits all” gig. I’m aggressive in my investments (all stocks). He’s very conservative (all government bonds).

At one point during the conversation he said something along the lines of “The US Dollar will eventually crumble and we are going to end up exactly like Greece.” I responded, “You really believe that?” Turns out he does.

While I obviously am no political and/or economic expert, I definitely don’t believe America as we know it is going to hell in a hand basket.

Maybe I’m ignorant? Maybe I’m too young to understand? Maybe I’m wrong? Maybe I’m a wishful thinker? I’m just not buying in to all the doom and gloom.

I’ve said it many times before, but I am all stocks for at least the next ten to fifteen years because I believe America will ultimately prosper. If for some reason we don’t, my retirement portfolio allocations will probably be the least of my concerns.

It’s funny how different people can be. Two people, two completely different opinions.

What do you think? What is the future of America? Will we ultimately prosper or are we doomed to epic failure like Greece?

On a completely random note. I took out money from the ATM last night and, for probably the only time in my life, I physically held one hundred thousand dollars. Okay, not dollars. Korean Won; same thing right? Took a screenshot because it’s kinda cool and I’m nerdy like that…

In case you are wondering this is equivalent to $86.

]]> http://www.punchdebtintheface.com/2012/01/america-doomed.html/feed 19 http://www.punchdebtintheface.com/2011/12/financial-christmas-carol.html http://www.punchdebtintheface.com/2011/12/financial-christmas-carol.html#comments Wed, 21 Dec 2011 05:56:37 +0000 Ninja http://www.punchdebtintheface.com/?p=5156

Guest post by moneysupermarket.com

Don’t you just hate it when Christmas draws closer each year and all the personal finance blogs start with their laboured and tenuous Christmas-related posts?

You do? Oh. Well, this definitely isn’t one of those, so please read on

Christmas typically means spending more time looking at your finances than we’d like to. It’s an expensive month and one where we have to make our money stretch as far as possible, in order to make it last to the New Year.

With all the furious spending and the avalanche of advertising and sales, it’s good to step back and take a look at your spending before you end up hung-over and penniless on New Year’s Day.

So, like the cautionary spirits who visited Ebenezer Scrooge in Dickens’ classic tale, I present to you the three financial spectres: The Financial Ghost of Christmas Past, The Financial Ghost of Christmas Present and The Financial Ghost of Christmas Yet to Come.

The Financial Ghost of Christmas Past

How best to make sure you don’t overspend this Christmas? Look at how you funded Christmas last year and the years before that.

If you whacked everything on a credit card and had repayment hangover which stayed with you until summer than it’s probably best to avoid using the credit card this year.

Ghost of Xmas Past

Or you could always look at the way you used the card and see if you could’ve been a little smarter about it. Did you just use the card you had at the time? Could you have shopped around for a better deal? A lower rate?

The Financial Ghost of Christmas Present

Dickens described the Ghost of Christmas Present as a jolly giant accompanied by a large feast. It’s nice to have a big meal with family and friends at Christmas, but there always seems to be a massive amount of left-overs thrown away.

Ghost of Xmas Present

Maybe think about cutting back, or at least being more pragmatic about the size of your Christmas meal this year. After all, Dickens’ Ghost of Christmas Present was able to change his size to fit into any space – so why not change the size of your meal accordingly?

The Financial Ghost of Christmas Yet to Come

 Want an incentive not to overspend this Christmas? A gaunt, towering spectre in black robes ought to do it. It was enough to scare Scrooge straight in A Christmas Carol and it might help you this year too.

If you overspend this Christmas, to the extent that it follows you into 2012, then Christmas 2012 is going to look pretty bleak. The third of Dickens’ ghostly apparitions served to show Scrooge that if he didn’t change his ways, things would get a lot worse.

Basically, when you’re spending this Christmas, think about how long you’re going to be paying it all off for and change your ways before it’s too late!

Ghost of Xmas Yet To Come

Have you dealt with any of these Xmas ghosts before? Have you done anything differently this year (spent more, less, nothing)? And just for fun, what’s your favorite Christmas movie (the correct answer is Elf or The Grinch)?

Life insurance is arguably the most boring personal finance topic known to man. In fact, it’s so boring I’ve only talked about it once before. It’s time to try to make life insurance less miserable, and more tolerable. Are ya with me? (If you aren’t with me, this should be right up your alley).

Since Girl Ninja and I are both young, employed, and relatively healthy we have personally decided that life insurance is not at the top of our priority list. But just because we haven’t made it an uber-priority, that doesn’t mean we don’t have some protection.

Four years ago, when I started my first day of work, the human resources office shoved a bunch of paperwork my way. Without really knowing what I was doing, I ended up making some pretty responsible decisions. I began contributing 8% of my gross pay to my 401K and I signed up for not only the standard life insurance policy my agency offers, but also a little bit of additional life insurance coverage.

Ask me how much life insurance coverage I have? Wait, don’t ask me. I have no freakin’ clue what my coverage is. Ha! How’s that for staying on top of your finances? I’ve been paying for life insurance for the last four years and have no idea what I’m actually getting out of it. Let me go run the numbers.

………

Okay, I’m back. Apparently, if one of you crazy blog stalkers actually tracks me down and de-skins me, Girl Ninja will get a pay out to the tune of $162,000. Nobody tell her that, or I might end up missing tomorrow

Since we have no dependents and no financial obligations, we don’t plan on beefing up our life insurance coverage in the near future. Once Girl Ninja turns into a baby factory though, it’s time to man up and protect our household (literally, since we will probably own a house by that time). It’s not like I’m familiar with
Insurance Jobs UK . Insurance confuses me

We would likely go with a 20 year level term life insurance policy to cover myself (I don’t like whole life insurance at all). I’m thinking $1,000,000 to $2,000,000 in coverage should ensure my families well-being in the event I pay an early visit to the big man upstairs. A quick quote says a million dollar policy would cost us $35/month and a $2MM policy runs $66/month.

If I die while Girl Ninja is a stay at home mom, that puts a lot of stress on her. But if she has a few million in the bank she should easily be able to sustain the Ninja house until she finds herself a new suitor (this whole conversation is kind of morbid isn’t it?). I’d be a pretty happy person if I was able to still take care of my family even after I was gone.

We will likely take out a $500,000  to $1,000,000 policy on GN. That way, if something happens to her, we can use this money to subsidize the new childcare expenses we’d incur as I continued to work.

Okay, enough about talking about hypothetical death. It’s depressing. BUT HOLY COW! A million dollar term policy is pretty stinkin’ cheap. I think I’m paying something like $22 a month for that $162,000 policy, so I should probably cancel it next open season and just buy my own million dollar policy for ten extra bucks. Time to quit being lazy, and start protecting my family.

Do you have life insurance on anyone in your household? If yes, how much. If no, why not?

If you like whole life insurance over term, tell me why.

Why is life insurance such an incredibly UN-sexy topic?

Are you setting yourself up for self-sufficiency? Who do you rely on for survival? Do you know what you need to do today, to have ‘enough’ 20, 30, or 40 years from now?

If you’re planning on social security providing for you, like a mother’s milk provides for her baby, it’s time to start “feeding” yourself. Here’s the steps we have already taken, are currently taking, and will take, to ensure we aren’t dependent on the government to pay our bills…

No stupid debt:

I’m not as intense as Dave Ramsey. If you want to take out a 0% car loan, fine by me. But if you are up to your eyes in credit card (or other high interest debt), then you need to get your crap together and start working your way out. The path to financial success starts with paying yourself (not Sallie Mae) first.

A reasonable mortgage:

Do you know how long a 30 year mortgage takes to pay off? THIRTY FREAKIN’ YEARS! That’s insane. I’m not even 30 years old! I couldn’t imagine making a payment for three full decades. Girl Ninja and I have no clue what the terms of our mortgage will be, but I can promise you this, we aren’t going to buy more house than we can afford. Home ownership is still a year or more away, but our goal would be to keep our mortgage payment under 30ish% of our net income. I like the flexibility of a 30yr mortgage, especially since you can pay it down in 20, 15, or 5 years if you want.

Investing/Saving:

This is where true government independence comes in. If you want to retire (aka not work anymore) you better start doing something about it. The Roth IRA and 401K are my investment vehicles of choice. By putting a few bucks away today, I plan to have a couple million waiting for me during my golden years. I don’t care how old you are, the time to start investing was yesterday. Get to it!

There are a few other things that consist of our financial commandments like living within our means or shopping around before we make a purchase, but I figured it’s best to bore you any longer. Moral of the story is this: If you are 50+, you will probably receive at least some social security benefits. If you are 50 (or younger) you may still receive some benefits, but it’s time to wean off the government teet and start feeding your bank accounts.

To those of you that are 50+, did you plan some of your retirement income around social security when you were younger?

To those that are 50 or under, are you banking on the fed financing your years in adult diapers?

Do you think there will be any social security programs when us 20-somethings retire?

What do you think the social security age will be 40 years from now?

p.s. I wrote this article one year ago and moved it to the front of the blog for relevant discussion today.

Girl Ninja and I are going to put on our Sunday’s best and pretend to be something we are not. What, you ask? We’ll be pretending to be a couple that is interested in buying a home. That’s right suckers, we are going to attend some open houses over the next few months, even though we don’t plan on purchasing anytime soon.

I’ve spent the last eight years of my life hopping from dorm to dorm, apartment to apartment, and condo to condo. Needless to say, I’ve gotten very use to living in small spaces. I’ve also gotten use to packing up the bags and moving every single year to a new residence. Girl Ninja’s residential history is no different.

Obviously, when you buy a house, you need to be comfortable with the idea of living in said residence for at least 5 years (my personal preference is 10+ years) in case the markets shift. The thought of establishing a more permanent residence is both exciting and scary. It will be nice to have a place that we can really make our own. It will be nice to have three or four bedrooms instead of one. It will be nice to have a garage to park our cars in. But let’s not forget, a home is freakin’ expensive. They come in all shapes and sizes, and it’s intimidating to think about buying something we know very little about.

I mean think about your house. Are there things about it you realized you don’t really like now, but overlooked when you bought the place? I imagine I’d walk through a house and be like “Oh, I don’t really care that the laundry room is downstairs”, but after a few months of living there, I’d hate that it was. Or perhaps I’d think “Oh this formal living room space is a nice addition”, only to realize formal living rooms are seldom used.

I make sure to ask all of my home-owning-friends what they do and don’t like about their current places. What they wished they would have done differently during the home buying process. And if any of them have buyers remorse. The insight they provide is incredible, but can only go so far. 

We’ve taken it upon ourselves to get educated and get out there. No better way to learn what we like and don’t like then by seeing a million places right? In fact, I’d argue there is no better time to go house hunting then when you aren’t really wanting to buy a house. This will help keep our emotions out of the process. I honestly want to be the king of open houses. Ya know, every Sunday after church hit up an open house or two. Get an idea of what’s out there; gain a better understanding of what our budget will afford us.

But does pretending to be potential home buyers make us bad people? I mean, it’s not like the real estate agent is showing the house for fun. They are trying to sell the thing. I don’t think I could just be like “Uh, so we aren’t gonna buy this place, but will you take the time to walk us around and show it to us?”. Super awkward.

I don’t know, maybe it’s not that big of a deal? Only ONE person is going to end up buying the house so we wouldn’t be different than the other 99% that didn’t buy. Am I speaking truth or just trying to justify our silly antics?

Moral of the story: We want to go look at a bunch of houses we aren’t going to buy, but in a way that doesn’t totally waste someone’s time. Since I’ve never been to an open house before I’ll relay some questions to you all for help

1. How many open houses have you been to?
2. Anyone else gone open house-ing, even though you weren’t in the market to buy a home?
3. What’s the atmosphere like at an open house? Is there pressure from the selling agent to put in an offer? Or is it more casual, where Girl Ninja and I would be free to roam around as we please?
4. Should we tell the selling agent we aren’t ready to be home owners yet, but are just getting a feel for the market?
5. What did you wish you knew about the home buying process before you started it?