Hopefully you've finished paying off the Christmas credit card bill. Maybe you've even thought long and hard that spontaneous purchases aren't the way to go. Perhaps, the sting of working overtime to finally get in the clear has scorched your purchasing patterns like a branding iron marks a steer.

And then again, maybe not!

Maybe you're already pouring over the shopping catalogues perusing the easter eggs on display and circling them for your spouse to conveniently find laying around. The kids have already been talking about their desired eggs and the relatives have hinted that they will be buying easter eggs again this year. Does the circle ever change?

Maybe I'm just the Easter Grinch but I happen to think that perhaps buying easter eggs might be a little over the top - or at least we tend to take it that way.

An egg is no longer an egg. It has to be the biggest, best quality, packed with a novelty, packaged in my favourite team's colours or shipped in from Bonn. The Red Tulip 100g egg no longer cuts it.

To impress, this year, it's going to take a bigger effort than last year. Unless it comes with more than the easter eggs I bought last year - how can I expect that my loved ones will feel loved?

Wasn't easter about a guy dying on a cross to save the world from their sins? And easter eggs have What? to do with that....

Oh, that's right. They symbolise new life. Or at least another reason to increase my credit card...

Posted by Stuart at 8:16 AM | Permalink

My wife has a theory and it goes a little like this;

"Women shop more than men but men spend more than women."

Is she right? Does she have a valid theory?

Her theory tests the age-old stereotype that woman have a genetic-DNA-thingy that propels them forward in the shopping stakes. For it may just be that men are the ultimate consumers.

When she first shared this enlightening theorem with me I balked at the notion but as I contemplated it further I realised that she may just have a point.

Taking my spending habits as a test case scenario I quickly realised that the majority of purchases that I made were above $500; laptop, iPaq, trip to Tasmania, VW Kombi project, software and I'm saving for a Canon 400D.

My wife, on the other hand, buys lots of clothes. Frocks, dresses, shoes, jeans - you name it she's buying it. In fact, more than half of the times that she goes shopping she will come back with something. The difference is though, that she will have only spent a maximum $10-20 on her shopping trip and she only shops like this once of twice per month.

So, while she seems to ALWAYS be shopping - while I never go - she ends up spending far less than I do. What's wrong with this picture?

Posted by Stuart at 6:36 AM | Permalink | Comments (4)

As the acquisition fallout finally renders itself on the pavement YouTube's founders, Steven Chen and Chad Hurley, are left with quite a predicament.

What do you do when you're suddenly worth more than $300m? Each!

I thought a certain amount of hypothesizing wouldn't go astray. Certainly! Why report the facts when a little fantastical fiction is easier to ponder?

So, if Chad and Steven are hankering for ideas here's a few possibilities;

1. Buy a country - Sure. You could just move to another country. But why settle for living in a place that' not your own (isn't that renting). Therefore the best option would be to buy the whole country. Yet, there seems to be a shortage of countries for sale at the moment so a hostile corporate takeover by way of paying off their debt and holding the country at ransom might just do the trick.

   On offer, Eritrea formerly Ethiopia, Seychelles, now that would be nice, Fiji or they may even consider The Bahamas.

   They could even pool their wealth and buy Barbados.



2. Sponsor a few children - not taking into account inflation or interest on their funds they could sponsor 625,000 children, each for 1 year or nearly 35,000 children for their whole lifetime.


3. Buy all 10 of the world's most expensive cars - now let's assume their not going to be as philanthropic as we first assumed. They could easily buy all ten of these cars and still have change left over to build an add-on garage to house them.


4. Sail the world in their luxury appointed yacht - while they wouldn't be limited with their choice of cars they may have to make a decision which yacht you'll moor at the boat club. But you may have some left over change to buy the yacht club, if they have trouble finding room to berth it.


5. Or, settle down in their new house - in fact, if this is a guide to home prices they shouldn't have too many problems finding something within the budget.


6. Buy some bling - there is no use being wealthy if you can't tell everyone that you're filthy rich. And what better way to do that, in style, than to spend a small countries GDP on a watch. $11m - you've got to be joking!

And while they're thinking it over they may as well chew over a quick sandwich and a cup of coffee.

Still, you boys deserve it. Those 20 months of hard-work must have been tough...

Posted by Stuart at 8:07 AM | Permalink

Paul Clitheroe in his book The Road to Wealth explains the dichotomy of human endeavour by first listing results from a survey asking "What people wanted" and then matching that with "What people spent most of their time chasing".

10 Things People Want

1. Love
2. Connection
3. Fun
4. Peace
5. Freedom
6. Security
7. Growth
8. Self-expression
9. Adventure
10. Able to contribute

Now compare this list with the things we chase after...

The Things We Spend Most Of Our Time Chasing

1. Money
2. Fame
3. Sex
4. Recognition
5. Power
6. Responsibility
7. Achievement
8. Big House
9. New Car
10. Swimming Pool

Not surprisingly Yahoo! Finance wrote a piece on Making the most of the money we have that was followed up by a poll on Lifehacker gauging reader's views one defining "Affluence". Lifehacker posed these three scenarios;

• Lots of money, but not necessarily a lot of time
• Lots of time, but not necessarily a lot of money
• In a perfect world, I'd like to be a happy medium between the two

of which the third option was by far the most desired while almost 4 times as many respondents wanted more time than money.

So, that being the case why do we still chase after the things that don't help us enjoy a healthy lifestyle?

Greed. Bad Priorities. Inability to retain focus on what's important.

Society continually perpetuates the notion that we should be dissatisified with what we have and yearn for more. Why do we need a new OS for our PC's? That new car we bought 4 years ago has now been superseded by a new shape and more gadgets. And, it's no longer good enough to have an MP3 player - it has to be an iPod.

It's no surprise that Laura Rowley's article cites;

The group who most desired time rather than the money? Men age 45 to 54, with 61 percent reporting they would make the tradeoff.

Why this age group? Because they've settled for every materialistic whim since they began their careers and have now realised they were trying to grasp the wind with greasy hands.

Can a healthy lifestyle be attained by chasing the things we listed as the top things we wanted?

Sure. Provided we tune out to societies continual lust for more and allow ourselves to be ourselves...

Posted by Stuart at 5:57 AM | Permalink

...but you do need to employ one, or two.

FMF started this post and as I followed the links I found that myself disagreeing on a couple of points.

My e-journey finally took me to this post on using financial planners. FMF's opinion was "If I was to use a financial planner, I wouldn't want one who wasn't in better financial shape than I am." and illustrated this point referring to not employing the services of a fat doctor.

Birds of a Feather Flock Together...And Fools Seldom Differ

I understand FMF's point but his opinion is slightly flawed. For if we carry that notion forward he wouldn't use a doctor to operate on his heart who also hadn't had a heart operation. This is foolish thinking in my book because it limits the amount of knowledge you are willing to hear and process. It's really the same argument that people have for keeping the friendships they do - we mostly tend to those who have the same ideas and agree with our worldview.

Most millionaires would employ the services of more than one accountant or financial planner so that they can be stretched. It's their ideas that we need to become wealthy more than their advice. And their ideas come from their education and the fact they work with many individuals who have specific requirements that may be way outside the box.

Having said that, I agree with the heart of FMF's opinion and that is if financial planners aren't willing to take the same risks and succeed then their advice has limited value - but it still has value! As people on a journey to financial independence, or whatever your financial goal is, we can't know all there is to know about everything. So we find advisors we can trust and speak excellence through how they handle their own affairs and those of their clients.

Our Goals May Not Line Up With Our Accountants

FMF is also making a big assumption that if someone is going to give good advice they must personally have the same goals and priorities. How can this be valid? If a financial planner personally values lifestyle and time with their family over the next million dollar profit doesn't mean that they aren't capable of giving great advice. My goals don't have to match those of my mentors or my advisors.

However, they do need to understand my goals and dreams. If their worldview clouds their financial advice then it is as FMF espouses - not useful.

In a Nutshell

Never write someone's advice off because they don't fit your mold. We employ accountants and financial advisors because they have a finger on the pulse in areas that we may not. They see ideas that we may be blinded to.

In reality, all they are doing is offering advice. Heading towards financial independence I need to "eat the chicken and spit out the bones."

Posted by Stuart at 6:26 AM | Permalink

Don't you hate it when you feel conned after having your emotions tickled?

Let me put this in context. I'm reading this article titled "Serious and Frugal, Far From Flashy, Davis Sees Himself as a Regular Guy" by Lloyd Dunkelberger on the life of Tampa's Jim Davis. The article starts out by portraying a man who having wealth, power and influence decides to steer his life without them. It's a picture we don't rarely see. In fact, it's a picture that seems to be too good to be true. But, we follow the ensuing detail imagining a man who is about to achieve some incredible humanitarian task - like offloading his family wealth to some poor third world nation.

Instead, three paragraphs in, we're slammed to the ground with;

That background, Davis says, gives him a connection to most Florida voters who are also struggling to pay for insurance, are worried about rising property tax bills and want better schools for their children.

Aaarghh! What happened? One minute I'm envisioning a man about to change the course of the world through some benevolent action and the next I'm brought to the ground with a "Vote for me" thud. But wait! Surely the editorial of some reputable news service would dig deeper to reveal why this comment needed to be made.

Alas, the article continues along the new chartered course without any mention for its deviation. We've been conned by a journalist playing with our emotions again and to think they didn't even disclose the sponsorship of the editorial. Please tell me it wasn't a paid article?

Posted by Stuart at 8:17 AM | Permalink

If "Image is Everything" then the type of car you drive is telling the world a part of your story. Is it a good story thus far, or are you hoping for a fairytale ending?

Here's a list of 5 reasons why we buy the cars we do. (BTW - I think we actually purchase them with these reasons in this order as well).

Status

---

"My boss should drive a better car than me!" is one reason we often search for something a little less extravagant. In fact, how we perceive others level of success in regards to our own grants us a benchmark from which to purchase within. If you are a successful small business owner, your Datsun 120Y is most likely going to be traded in on an upmarket saloon or base model sports car. A high level exec earning $100-200k pa is more suited to a mid-priced Jaguar or Mercedes while an apprentice plumber should be comfortable with her rusting Ford panelvan.

But the other end of the status spectrum is equally interesting. What happens when you are earning the high incomes but the position you hold is seen differently? For example, a CEO of a not-for-profit charitable organisation is most likely to raise the ire of contributors should they be seen in a brand new Bentley.

Like it or not, our vehicles say something about where we perceive our place in the world is.

Performance

---

Hot on the heels of Status is the Perfomance factor. In fact, in some ways it's hard to separate the two because they're not mutually exclusive. Performance is either considered by two types of people - Revheads and the new Enviro-motorists.

Revheads want power - and lots of it! They want maximum torque, deafening noise and a rumble under the bonnet that makes a posse of Hell's Angels sound weak.

Enviro-motorists want cheap to run, clean, environmentally friendly cars that use any fuel that begins with "Bio" (because it's greener!) They like these types of cars because they say - "I care about the environment"

Both types of performance image seeker are at opposite ends of the spectrum and loathe each other's point of view.

Security

---

The Security image seeker buys cars that have incredible safety standards. Brands like Volvo, Mercedes and BMW are synonymous with this buyer. They would rather buy a car that's 20 years old with a badge from one of these makers than a brand new Ford or Chrysler with better technology. Why?

Price

---

Price is only important when it comes to what a financial institution will loan you. Most people don't pay cash for cars these days so a HP loan or salary effective novated lease is usually the main method of sourcing finance. Obvioulsy, the more you are allowed to loan adds to your image and personal wellbeing!

Economics

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The Economics-image-seeker has been around the traps for a while. They bought and sold cars over the years and have become jaded at the waste of money tied up in keeping your image healthy. Therefore, this image seeker finds cars that are likely to hold a greater portion of their value when it comes time to trade it in. They're not prepared to buy a car off the show-room floor because they know it will only set them back a minimum $10K to drive it onto the street.

These image guys are frugal and they would usually buy a car in the reverse order of this image-seekers list.

The Big Question

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What are you currently driving and where does it place you on the list?

Posted by Stuart at 7:55 AM | Permalink | Comments (3)

Matt Goss from the New York Times has been circling the globe in a bid to show travellers that it can be done on the cheap. (If you're after some logistical details of the 90 day trip check out his FAQ's page).

Matt's assignment was to travel the world in 90 days as any traveller could do. There have been no perks or freebies accepted by him as a result of being a "Times reporter". Instead, he's chosen to tour the globe the same way anybody could.

In the end, I decided to buy only the first and last segments of the trip — Newark-Lisbon on May 11, which I purchased for $547 through TAP Portugal's Web site, and Beijing-San Francisco on Aug. 11, for $898.67. To get from Point A to Point A, I would hopscotch the globe using low-cost carriers, buses, trains, ferries and serendipity. Or at least that's the plan.

Matt set off mid-May and is due to complete his journey shortly. Even though he's spent time in remote locations he's managed to submit his articles every Wednesday and taken tips from his readers as to where to go and what to do as he's traversed the globe.

As any traveller prepares, the daily budget is a major item. Matt decided on US$100 for nightly accomodation and 30 Euros for his daily food requirements. This is where the fun begins as his first meal in Bolgna set him back 25 Euros. How do you stay frugal when you've blown more than 80% of your daily budget on one meal? Fortunately Matt skimps and saves in other areas and makes up for the shortfall as he tries to stay on track.

There's some great reading in his articles and his full trip, including the updated map, can be sourced here. [Note: It does require a free subscription to avail yourself of these].

Posted by Stuart at 7:15 AM | Permalink | Comments (1)

Taking a vacation is paramount to your wellbeing whether it be a trip overseas or just lounging around your favourite summer retreat. Downtime for humans is just as important as it is for machinery.

I once read a fable about two woodcutters. One wouldn't sharpen his axe as it became unusably blunt the more he chopped with it while the other would regularly stop for breaks and rehone his blade. At the end of the day, the woodcutter who stopped regularly to maintain his axe had cut considerably more wood then the one who just kept going.

We can often think it's easier to just keep going but downtime is valuable as it helps us reset our focus and gives us more motivation to do the things we do.

Deb and I plan to take a month of and walk, or cycle, our way around Italy (this won't happen until the family is off our hands - long-term goal!). While it's a way off I still like to dream and think how this vacation could work and what are the resources we will need to achieve it.

So I figured that if it could be done on the cheap then we should try and calculate ways to do it now. I read this article at About.com where the author, James Martin, presented a list of 12 frugal tips for vacationing around Europe. These are all good tips but I thought there were a few more that could be made so I've included his 12 and added a few of my own.

Continue reading "Taking a frugal European Vacation" »

Posted by Stuart at 9:27 AM | Permalink | Comments (2)

The title of this article, More Work = Less Time Devoted to Finances and Less Blogging caught my attention as I was scouring pfblogs.org. The title inspired my own thoughts towards setting priorities in my own life as we all have the same 24 hours to work with.

I know people who can't manage getting their sorry butts of the couch and grabbing life with both hands and I also know people who can't slow down and 'smell the roses.' I'm sure we can all identify some acquaintance with either extreme.

We all need to realise that although our own dreams and aspirations motivate us, they don't naturally motivate those closest to us - or even near us. I suspect that if you were to ask bloggers (those who are blogging for profit) what their motivation was for spending their time doing this activity you would receive multiple and varied responses. In fact, it you were to give them a monetary earnings figure and then also include the personal cost many would want to change something about the deal. Some would be prepared to give more thus earning more while others would be happy to trade lower earnings for a smaller personal cost.

It all comes back to priorities. What is it that you want your life to be like? It can't all be 'beer and skittles' and it can't all be "all work and no play." Each of us have priority thresholds - benchmarks that we will consider trading but only if we can see some benefit to our over all lifestyle.

Continue reading "Getting your priorities right" »

Posted by Stuart at 10:33 AM | Permalink | Comments (2)