Monday, October 26, 2009

Continue working for good health?

Thinking of retirement? Read this 1st and plan for the 3rd & 4th stage of life. It may be better to continue working after retirement be it a full or part-time work.

For a Healthy Retirement, Keep Working

Have blessed day!

Thursday, October 22, 2009

Spend money wisely


Interesting article.

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4 steps to spend your money wisely
by Craig on October 21, 2009






4 Steps To Help You Control Your Spending



Budgeting is essentially the process of asking: should I spend my money on this or that? A person’s income represents the fixed dollars with which they have to spend. When someone sets their budget they must decided (based on their preferences) what to spend on ‘this’ and what to spend on ‘that’. The problem is that sometimes people prioritize the wrong things. They buy ‘this’ when they should have bought ‘that’. Being able to control you difference is the differences between being frugal instead of cheap. If you find yourself in a situation where you often buy things you regret then these four steps will help you focus your spending.



Step #1: Take a visual inventory of the stuff already in your home.



Have you ever helped someone move? If you have you know that a question people often ask while moving is, “How did we get so much stuff (junk)?” Every item in your home has been purchased with money you labored for. As you walk around the house look at your items and ask:


- Does this item give me satisfaction?
- Did it end up being as useful as I wished?
- If I had to buy it again would I?
- Do I have more things than I know what to do with?



If you answered negatively more often than not, it is likely that you are having trouble directing your spending towards things you truly care about. Perhaps you are purchasing impulsively. Nevertheless, your spending is such that it brings more frustration than satisfaction.

“But store up for yourselves treasures in heaven, where moth and rust do not
destroy, and where thieves do not break in and steal.” (Matthew 6:20 NIV)






Step #2: Ask your spouse a simple question – “What are some of your favorite memories?”


Our Experiences with Stuff Dulls Over Time



In the book Your Money and Your Brain author Jason Zweig writes:



“We get used to almost anything we are frequently exposed to. That’s why
the money we spend on big purchases gives us such a perishable pleasure.” (bold
added. pg 236)





Zweig goes on to use the example of a new car. Remember that new car? It “glistens like a gigantic jewel”. However, the cycle of auto life requires that within months (or even days) there will be dings and scratches in your fine automobile. After just a few short months, we are disillusioned because the car is not bringing as much satisfaction as we intended. So before you know it you are on the market for another new car. Regarding this tendency Zweig writes:




“Unfortunately, the vision pales by comparison when it collides with reality. …
Instead of realizing that big spending will probably never make you happy, you
conclude that you simply spent your bundle on the wrong thing.” (pg.
236-237)





Our Experiences with Memories Sharpen Over Time

Spending that brings satisfaction is spending that creates memories. While some spending is pragmatic and functional (i.e. fridge and stove) we must ultimately remember their function. I think about great time saving appliances like the dishwasher and the microwave. That time void has not been filled with activities that create memories; instead it is filled with more activity. Things like vacations actually leave a sweeter taste (assuming you pay cash!) as the days go by.


“The vacation in your photo album is more pleasant than the one you actually
had, and that may skew your memory. … Your memories, then, are not just
recollections. They are also reconstructions” (Jason Zweig, 238).




Why not plan your spending in such a way that you spend a larger percentage of your money on things that are rewarding (like giving) and steer away from spending money on stuff that dulls over time?





Step #3: Have a ‘this’-and-‘that’ face off.




This really is a simple exercise. It has been observed that hindsight is 20/20 so go ahead and use that clear vision of the past to guide your future spending. Take a few items in your home and place them side by side and ask, “Right now which item am I happier that I purchased?” Your answer will help guide your future spending.






Sample A: Luggage






Exhibit A







Exhibit B

These two pictures of luggage have the same purpose – they help haul my useless junk around the world. So far both of these items have accomplished the task with equal effectiveness. Any time my junk does not arrive it is typically the fault of an airline, not the luggage itself. There is one significant difference – cost. The two bags in Exhibit A cost about $85 and the cost for Exhibit B was $5. Using my 20/20 perspective I now know what a complete and absolute waste of money to pay $85 for something I can find for $5 at any used clothing store in America. As a result, I have now decided that I’ll buy all my luggage second hand.



Sample B: The Vacation and the Fridge




You will notice that my fridge (which has only been used for less than three years) is rusting. I’m finding that the type of a fridge does little to contribute to my spending satisfaction. In the future I am going to think about functionality without any fancy bells and whistles.


I have a whole slew of vacation pictures I enjoy looking at. Those great memories grow year after year. Vacations always provide some special family times. As a result, I enjoy spending money on vacations because I feel like they contribute something to my life’s satisfaction.



Step #4: Adjust your spending accordingly.


Take what you have learned about yourself and create a future where you spend your money wisely according to your values. A budget is the best way to help direct your spending. Don’t keep making bad money choices! When setting amounts for your budget categories make sure they fit your personal preferences.



A final thought.


Try incorporating your gifts to people into the same evaluation. I suspect you will find that there is a growing pleasure that comes from giving.


Let me leave you with one final quote from Jason Zweig:


“While the money you spend on acquisitions tend to feel more and more like a
mistake as time passes, the money you spend on experiences is apt to grow in
value as your memories grow warmer.”

How do you focus your spending to be sure you’re spending money wisely and not wasting too much on perishable stuff?

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Monday, October 12, 2009

Why God’s way takes longer

I have always enjoyed the nature as it's a reflection of God's work. The trees particularly reminds of the walk a believer goes about and it also can be applied in personal finance.

I enjoyed the article recently written in christainpf.com. May it be a blessing to you too.

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It is kind of like becoming a tree
http://www.christianpf.com/becoming-a-tree/

I was staring at a tree the other day just day-dreaming and kind of worrying about how long it was taking to get answers to prayer for a few issues in my life. I was reminded of…

Psalm 1:1-3
How blessed is the man who does not walk in the counsel of the wicked,
nor stand in the path of sinners, nor sit in the seat of scoffers! But his
delight is in the law of the LORD, and in His law he meditates day and
night
.

He will be like a tree firmly planted by streams of
water, which yields its fruit in its season and its leaf does not wither; and in
whatever he does, he prospers.


In my case I have been diligently trying not to “walk in the counsel of the wicked,” and it seems to be making my answers to prayer take even longer. I have been earnestly trying to do things the right way, knowing full well that by cutting a few corners or compromising my values I could make the answers appear faster. The major difference being that I can get mediocre answers doing it my way or the fruit God promises by doing it His way.

The pre-requisite for our fruit bearing from Psalm 1 is that we:

1. Do things God’s way
2. Stay in the Word

If we do these two things we have the promise that whatever we do will prosper and that we WILL bear fruit IN OUR SEASON.

Trees grow slowly

As I was staring at this tree I began to realize that trees grow slowly. You plant a seed for a tree and it takes a while to sprout and takes a while to grow to a decent size.

Grass and even plants, on the other hand, grow a lot faster. They sprout up quickly and sometimes you can even notice growth one day to the next. I have been enjoying watching this rapid growth with all of the plants in my vegetable garden.

Grass grows fast

Then it kind of hit me that God wants to make me “like a tree.” He isn’t interested in seeing rapid growth that will not make it to the next season and is ultimately unsustainable. A tree, though it grows slowly, becomes a lot more sturdy and is able to withstand challenges that grass and plants can’t.

I am reminded of a storm we recently had that snapped my tomato plant right in half. The plant had grown to about 2.5 feet in a matter of months and was not strong enough to survive when the winds came. God wants to make us strong and sturdy to withstand the storms in our lives.

Psalm 92:7
“That when the wicked sprouted up like grass and all
who did iniquity flourished, it was only that they might be destroyed
forevermore.”



Psalm 92:12
“The righteous man will flourish like the palm tree,
he will grow like a cedar in Lebanon.”



Trees yield more fruit

I am excited about the tomatoes that my plants will produce this summer, but even the best tomato plant would be lucky to produce 40 lbs of tomatoes in a season. But older mature trees can produce over 1000 lbs in a season.

The downside, of course, is that trees don’t bear fruit 3 months after you plant them like many vegetable plants will. Some trees will take a few years or even longer to bear fruit. I remember the frustration I had with this when I wanted apples from a new tree and learned that I may have to wait a while.

Patience seems to be a rare virtue in our society these days, but it is one that we ought to develop. God seems to like taking the long road with a lot of things and as I begin to see the reason behind it, it causes me to say, “huh, God really is smarter than I am.”

Trying to be a tree

It’s tough watching the grass sprout up all around you and seeing others bearing fruit when you have been faithfully doing what is right, but we must not be short-sighted. We need to try to look at these things the way God sees them.

Though the tomato plants around us may be popping out some fruit, while we seem to wonder what is taking so long, our day will come. God is doing a work and creating something in us that will be around long after the grass has come and gone.

Galatians 6:9 (AMP)
“And let us not lose heart and grow weary and faint in acting nobly and
doing right, for in due time and at the appointed season we shall reap, if we do
not loosen and relax our courage and faint.”


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Monday, October 5, 2009

Diversification Statistics

Always wanted to know the statistic behind diversification and found this information in Joel Greenblatt's book, You Can Be a Stock Market Genius. He provides the following statistics by owning the following number of stocks:

2 stocks eliminates 46% of non-market risk of just owning one stock
4 stocks eliminates 72% of the risk
8 stocks eliminates 81% of the risk
16 stocks eliminates 93% of the risk
32 stocks eliminates 96% of the risk
500 stocks eliminates 99% of the risk

Now to do the mathematical calculatons to confirm his statistics.

Have a blessed day.

For a man's ways are in full view of the Lord, and he examines all his paths - Prov 5:21


Also read:

Diversification

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