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Monday, August 26, 2013

Free Money Finance - Invitation to reader profile and get free advice

Here is an invitation from readers to seek financial advice from the Free Money Finance site.  As was mentioned earlier, the contributions help many readers identify with the problem and learn quickly.

The other reader comments may help


 

 

Free Money Finance

Posted: 14 Aug 2013 11:32 AM PDT
The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.

If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.

Also, please leave constructive comments, questions, and so forth. Simply telling someone what a mess they have, how they have made poor decisions, and so forth is not helpful. There is a way to say, "That was a mistake, but here's what you can do to correct it" that both acknowledges the problem and offers a solution. It's this sort of feedback that this series is intended to solicit.

Next in the series is FMF reader VA. She answered my questions (in red below) as follows:

Please tell us a bit about yourself.

I am a 29 yr old female. I currently live in New York, NY and have lived here for six years. This city is expensive! My situation has improved a lot over the last two years, due to a higher salary and better managing of my finances. But I know I still have a long way to go. I am single.

Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.)

Income: $3200 take home pay/mo, post-deductions (health insurance ($100), subway card ($112), 401k ($420) are monthly expenses deducted pre-tax.)
  • Total After Tax Expenses: $2382
  • Rent: $1285 (soon to be $758)
  • Utilities (electric and gas): $60
  • Student loan: $170
  • Newspaper: $15
  • Food (groceries, restaurants and bars): $430
  • Travel: $222
  • Other: $200
This leaves savings of about $800/mo. I also receive an employer match to my 401k of about $200/mo. My employer pays for my cell phone, and I do not have internet or cable service at home.

Assets:
  • Emergency Fund: $5000
  • Investments: $5000
  • 401K: $10,500
Debts:
  • Student Loan: $5000
I've decided after two years of living alone that I can no longer afford it. Next month I will be getting a roommate -- savings of $500/mo!

What are the current financial issues you're facing (saving, paying off debt, etc.)?

By getting a roommate and increasing my cashflow by $500, I need to decide where to allocate the extra money. I feel that I'm behind on retirement saving and will likely increase my contribution by 2%. (Current is 8% with a 4.5% match). Next, should I pay off my student loan or put more into my emergency fund and investments?

What are your plans for the future (retire early, build your career, etc.)?

I plan to continue to "catch up" and aggressively save. It would be great to develop some side income as well. As far as the living situation, I don't know how long the roommate arrangement will last. I would like to move in with my boyfriend eventually. However that worries me as he has a large amount of law school debt, over $100k. I also worry about my long-term prospects in this city, as entering the real-estate market seems impossible. I do love it here and enjoy my job, perhaps it's worth the sky high rents. My overall goal is to save as much as possible to give me more options.

What's your best piece(s) of financial advice and/or your general philosophy on personal finances?

General philosophy is to spend where it counts. I love traveling and occasional restaurant indulgences. However my lifestyle is simple, free of gadgets and "stuff". I learned some financial lessons a little late in the game, and I wish I had saved more in my early 20s. Save early!
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Private banker: "Is there any good news?" - talk about Indonesia, India, Thailand, and Italy

Last week saw a barrage of unpleasant news about world economy:  India's plunging currency, Thailand going into recession, Indonesia in bear market (Indonesia has the world's 15th biggest economy with over l35 million population. )  Italy with big unemployment problems.

So what is next.?

The countries herein mentioned were darling of world economy before.  What has happenned?

Any new ideas?

Or we just dig in for the worst -  protect our assets from the repurcussion of these events?


From: Simon Black <admin@sovereignman.com>
Date: Wed, Aug 21, 2013 at 11:23 PM
Subject: Private banker: "Is there any good news?"


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Sovereign Man
August 21, 2013
Spoleto, Italy
Each summer, I've taken to renting a beautiful wine and olive estate in the Italian countryside and inviting some of the most interesting people I know for a week of lively discussion and debate.
It's an annual ritual I've recently adopted; there's no format, just a gathering of really unique people in a really gorgeous place... with lots of great food, great wine, and great conversation.
There's a dozen or so people in the dining room right now-- two private bankers who flew in this morning, a nuclear engineer turned restaurant magnate, the founder of one of the fastest-growing healthcare companies in the US, a highly successful Internet entrepreneur, etc.
But the topic that's on everyone's mind right now is what's happening in the global economy.
(1)The news this morning tells us that Thailand is in recession. Indonesia is in a bear market.

 (2)India's currency is plunging so rapidly that the government is desperately implementing capital controls.

(3) Japan's trade deficit was the third worst on record last month.

(4)Here in Italy, unemployment is at a record high, and financial-related suicides have increased 40% over last year (which itself was a record).
Adding insult to injury, the Italian government has banned cash transactions above 1,000 euros and rolled out a new army of tax police to seize people's assets in a guilty-til-proven innocent system.
One of the banker here, who hails from a boutique firm in Austria specializing in physical gold products, asked very plainly during lunch today: "Is there any good news?"
You bet.
The good news is that this fraudulent system of unchecked, unbacked paper currency is finally coming to an end.
Of course, our faux-scientists who have been awarded society's most esteemed prizes for intellectual achievement tells us that our monetary system is good, solid, and just.

But it's insane to think that four men control over 70% of the world's money supply.
In their sole discretion, they can effectively control the prices of everything, from real estate to rice options to the rates at which governments can borrow.
This system is simply not natural. It's not natural to grant such power and control to a tiny banking elite, no matter what the experts tell us.
It's so unnatural, in fact, it's about as sensible as hanging out with grizzly bears.
Governments and economists are there to tell us that the bears are safe and have been tamed by qualified professionals... that the trainers are the smartest guys in the world, and we should just trust them.
It might work for a while... but eventually, people are just going to get mauled.
That's our monetary system. And it doesn't take a rocket scientist to see that it's obviously not working. The signs are everywhere, from Japan to Jakarta, India to Italy.
And, as uncomfortable and difficult as interim transition period may be, the end of this corrupt fiat experiment is definitely something to celebrate.

Until tomorrow,
Signature
Simon Black
Senior Editor, SovereignMan.com
 
 
 
 
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  • A boots on the ground account from Iceland. The country was the first victim of the financial collapse of 2008. It's still in a very poor state, with a default and a significant restructuring inevitable.
  • But it also has a lot going for it. That's why I'm so excited about it's potential once it's forced to pull out all the stops and attract foreign capital. The opportunities for those prepared will be immense. It should definitely be on your radar.
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Free Money Finance - reader profile

The free money finance has ran a series on reader profiles and has so far published 110 posts.  These posts give us a realistic example on the examples and problems that are unique to each reader so that we may learn from these.  These examples are the best teacher on how we can manage our personal finances better.

Majorem Lending



Free Money Finance

Posted: 06 Dec 2012 12:28 PM PST
The Reader Profiles series has been pretty popular around here. So far we've done over 110 posts and, while I still have a few in the hopper, I wanted to let you all know that I NEED MORE of them to keep the series going.

So if you're willing all you have to do is email me the answers to the following questions (it's all anonymous -- don't worry about your name getting out, I use initials to hide real personalities):
  • Please tell us a bit about yourself.

  • Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).

  • What are the current financial issues you're facing (saving, paying off debt, etc.)?

  • What are your plans for the future (retire early, build your career, etc.)?

  • What's your best piece(s) of financial advice and/or your general philosophy on personal finances?
Take as much time/space as you like answering them, but don't be too short or people won't get the "meat" of your situation. If you want to see what others have done, all the posts can be found here.

Thanks!
Posted: 14 Aug 2013 11:48 AM PDT
I recently received a card in the mail from Vanguard. It read (in part):
Happy anniversary! You've been a client-owner of Vanguard for 20 years.
It went on to thank me for my loyalty, congratulate me on "reaching this milestone," and so forth.

Overall, I think it was a nice touch from them.

I have been with them a long time and IMO they are a great company. I'm hoping for another 20 years (at least!) together.

For those of you interested, here are the three funds I use the most at Vanguard.

I almost went through the exercise of calculating how much I've saved/earned with Vanguard in 20 years simply because my expense ratios have been almost nil compared to an industry average of over 1%. As we all know, 1% compounded over 20 years adds up to some BIG MONEY!
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