May

9

Let’s Use Some Common Sense





Alright, alright. After writing How to Finance a Car Without Paying Interest, I got a few really interesting comments that upset me. I don’t know why? People expressing opinions or trying to help me to see the big picture shouldn’t frustrate me - but they did. I’m a Leo… what can I say?

But I’ve calmed down, and have some things to say. Some of arguments presented to me on the other post are so… off from the point of the post. It seems I didn’t do a good job of making the point I was aiming for. I want to disassemble these arguments to make my original point clear.

Foxie said:

There are some cars that can be viewed as investments, though mainly those the average Joe can’t afford. Ferrari is what comes immediately to mind. There are MANY Ferrari’s that actually increased in value with time, some of which are worth millions more than what they cost brand new. […] It just shows that a well taken care of Ferrari can fetch a premium later on.

G.L. said:

There are always exceptions. There is a strong market for old, classic and soon-to-be classic cars. For example, if you know a lot about car maintenance and such, you could easily buy an old classic in bad shape for a fraction of its market value, fix it up and resell it. […] Alternatively, one could buy a classic car in good shape, keep it in good shape, and watch its value appreciate over time.

Alright. Let’s address this issue first.

1. A car is not an investment.

It’s not! No! In the post, I followed that statement directly by saying,

Anything that is guaranteed to depreciate is not an investment. No matter how much it costs, something that goes DOWN in value cannot be something you invest in […]

Most ALL cars are guaranteed to go down in value. Out of the millions of cars out there, only a teeny tiny microscopic number of them are ones that could be considered an investment. If you are going to buy a Fererri, you better not drive it, lest you get a dent or hit a rock or animal while driving. And heaven forbid you get in an accident! The same goes for classic cars, or “soon-to-be” classic cars.

I concede that if you love cars, and want to buy a few beautiful ones and keep them in a garage for 30 years, you may get a return on your money. I was not talking to the wealthy people who buy cars for fun in this post, however. I was talking to the millions of people around the world who are not wealthy and who buy a new Accord and justify the high monthly payments by saying it was “a good investment.”

2. A car is a very risky investment, should you try to make it one.

Cars like Ferarris are really, really out of reach for most people - like, 98% of the population of the USA. Just because you have a lot of money doesn’t mean that you can afford a car valued in the hundreds of thousands, either. Driving a wildly expensive car like a Ferarri will cost you an arm and a leg in insurance, and should anything happen to it, the hit you take will be akin to losing what most of us would consider an annual salary.

Even if you saved up $400k for a Ferarri, it would still be unwise to buy one unless your income was at least triple that in one year. To justify buying a Ferarri, you have to see it relative to your income. Let’s say you make $50k/year and manage to save $25k each year, after about 12-14 years (assuming you’re investing the money while saving), you’d be able to buy a Ferarri. I think it would be INCREDIBLY unwise to put your 12 years of savings into a car, especially one valued at 8 times your annual salary! No, no, no, no, no. I don’t know how you’d manage to make the mortgage on your house AND the car insurance payments each month on a 50k salary, not to mention save any other money from then on.

I also just wouldn’t feel comfortable advising someone else to put all of their savings into a car. It’s an enormously volatile investment, if it is one at all. There is no guarantee that the car will appreciate, no matter what the past returns have shown. There is no promise we’ll even be driving internal combustion engines 20 years from now! And the assumption that the car will never be hit - either by your error, someone else’s, earthquake, tornado, etc. - is just foolish. Putting your money in a tangible asset such as a car is just… folly. It can be a fun idea if you have millions and your Ferarri or classic cars are a small portion of your investment portfolio (example Jay Leno, Bill Gates), but for almost everybody on the planet, this is just a bad idea.

3. My plan was for people looking to drive a newer car, not park one.

The classic car example was a good one, and I agree that classic cars, fixed up and maintained well can hold their value and appreciate some, but it is a completely impractical choice for most of us. The example I used in the original post was of someone looking to upgrade from their $500 beater car to something a little nicer and safer. For someone in that position, saving up for 3 years to buy a $16,000 classic car to park isn’t practical, or possibly even feasible.

While your argument is a fair one, it completely misses the point. I am not just here “spewing axioms” to pass the time - I’m trying to give solid advice to people who don’t know the options out there. I wanted to teach the “average American” that a car is not something you invest in with all your disposable income - it’s a THING that you buy. Saving up for a car and buying one later isn’t radical advice - it’s solid advice that will keep you away from paying twice your car’s value in depreciation and interest, and keep you out of debt. That was my point, the the entire purpose of writing about this all in the first place.

JB said:

[…] sure you’re not paying interest, but if you’re buying 3 or 4 cars in a year or two span… you’re paying a lot of sales tax and licensing fees! Probably more than the interest you saved.

Sara A said:

Actually, don’t forget to factor in other potential costs of a new-to-you car, such as title transference cost, change of insurance, possible new inspection sticker, and possible new registration. Not to mention the amount of your time involved with finding a new car and selling the old.

Good points, my friends. I was not advising everyone to go out and sell and buy their car every six months. I would advise turning around your car every three to five years, as I plan to do personally. I said in the post:

[…] getting a better car every six months (if you’re impatient!). Here’s how this […]

(Italic emphasis added for this post.)

Any intelligent person who says, “I can afford a car payment of $400 a month,” has more than $400 disposable income each month, and can therefore afford to cover the sales tax, licensing, etc.. Saying that these are reasons to avoid upgrading once and a while is not fair to the person making the decision. I like to assume people are somewhat smart and will account for these extra costs. You both do make a valid point though.

The plan I laid out will keep debt away, and allow you to grow wealth.

I have a friend named Joe. Joe is 50 and hasn’t bought a new car in his life. He drives a $25k Subaru, and gets a relatively new one every two to four years. Because the value of the car doesn’t depreciate much in the few years that he drives it, he’s able to drive a newer car in perpetuity, only paying $1k-$2k here and there for inflation. Once you work your way up to a nicer car, for example one valued as high as his is now, the cost of driving a nice car for the rest of your life is minimal.

To me, this just seems like common sense. A large portion of middle-class Americans in today’s world buy a new car every few years. Usually they buy them brand new, and then roll the debt difference, due to depreciation, into each next new car. I meet people every day who owe $10k to $30k over the value of their new car for having done this for so many years - including some of my family members. This is just ridiculous!

The whole point of the post was to help people see that buying a new car is not a good idea, that “investing” in a car is not a wise use of your money, because the odds that it will depreciate are extraordinarily high. A wiser choice would be to work your way up to a nice car, and then maintain that car and sell it every few years to move laterally to a car a slightly newer but of the same value.

If you work your way up to a $25k car that is, say, five years old - in two years, that car will have lost almost none of it’s value. There is a sweet spot in a car’s life around four to seven years old where it holds its value; it’s new enough that it’s worth the higher price, but not old enough to really become outdated or worn down. It’s during that period that one should buy, and continually revolve through cars (if one wants to keep driving that new of a car). I would recommend selling around the six-year mark of a car’s life and buying another with the money at the 3-4 year mark. For almost no money (all things considered and factored out), you end up driving a nice car perpetually. I’ve seen it done by many people (my grandparents, my uncle, Joe, and other older friends). The plan works, and will keep you from paying “stupid tax,” i.e. craploads of interest on rapidly-depreciating new cars.

I hope this makes my point clear. Comments are welcome! I don’t want to offend anyone; I think I am right and have loads of examples and math to back up my point. I am not trying to call anyone stupid - but please, use your friggin’ common sense!

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May

8

Carnival of Snowflaking #3: The ‘Get Motivated!’ Edition





Hooray! It is with much enthusiasm that I announce to you today the third Carnival of Snowflaking! There were a few more entries this week than last, and I find that exciting. I hope we can keep snowflaking more contributors (get it, har har) to this carnival until we have a real spectacular thing going :D

Nearly 100% of the articles featured in this carnival today were about snowflaking extra money toward debt. I personally think it is just so AWESOME to get out of debt, and am proud of each and every one of you for having the guts to tackle the beast with your own bare hands!

In addition to being just plain awesome, it’s also such a good financial move to stop being indebted to anyone. Whatever your reasons, living without the shackles of debt is the only liberating way to live. Jonathan at Master Your Card recently said:

Have you ever stopped to consider what debt takes from you? The natural response is often “money”; that being said, I want you to pause and look beyond the short-term analytical frame of mind so often tied with personal finance: I want you to consider where debt takes you as a human being, as an individual. Stop focusing on interest rates and APRs ; clear your mind of all numbers, statistics, and calculations. How can being in debt affect your everyday life and the way you view that life? Judging from the most abstract perspective I can muster, there are three long-term effects of perpetual debt: the loss of one’s freedom, an attitude of hopelessness, and a tax on one’s thoughts…

SO! It’s time to get out our reading-caps and get to snowflaking! All of your snowflakes - big ol’ fat ones and little ones that you can hardly see but which make great snowmen - are nearing you to your goal of becoming debt free, one little bit at a time.

It’s death by a thousand cuts, people! Or… freedom by a thousand snowflakes. There is great power in snowflaking. On with the carnival!

Editors Picks

  • Finance Girl presents My Co-Worker Debbie’s Old-School “Keep the Change” Program posted at Finance Gets Personal.
    This is a GREAT way to gather extra snowflakes! I use the Keep the Change program at my bank, but even if you don’t have an automatic program available at your bank, you can save snowflakes all on your own :)
  • Amy presents Spending My Way to a Snowflake posted at My Daily Dollars.
    I say, if you’re going to be spending money, figure out where that money’s coming from. I think the best way to gather snowflakes is to give up some things, and Amy’s is a great example of how to do that - without depriving yourself.
  • Zach presents sell the truck, retire early posted at Pennywise and Poundfoolish.
    Cars are silly. Could you really do without one? Zach explains his family’s decision to sell one of their vehicles, and he may possibly sell the other as well. I can’t wait to see what’s decided! This is one way to get some huge snowflakes going toward your debt or savings. But then again, we all know I’m about the “extreme” compromises that can be made to get out of debt sooner!

Great Ideas for Snowflaking

Snowflaking Stories

Thank you to all the participants for sumbitting your posts on snowflaking :D Here’s hoping we keep snowballing the carnival onwards and upwards. Be sure to check out Foxie’s Ferarri Dream next week for the carnival #4, and make sure to get your submissions in ASAP.

Thanks for stopping by ;)

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Filed Under money and finance, snowflaking | 10 Comments 

May

7

Money Hacks #11!





The Money Hacks Carnival #11 is up at Save and Conquer! My post Saving Like Crazy, Investing Advice, and Life After Debt was featured in the Savings section. This was a big carnival - well done, Bryce!

If you’re visiting from the carnival, welcome! If you’d like to be a part of the Antishay community, feel free to subscribe to my email updates for free, or sign up for my free RSS feed. Thank you for stopping by!

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May

7

How to Finance a Car Without Paying Interest





I was driving along the other day and saw this car in front of me… I couldn’t help but take a picture.

Mercedes an Investment??

I had to laugh. An investment?

People, a car is not an investment. Anything that is guaranteed to depreciate is not an investment. No matter how much it costs, something that goes DOWN in value cannot be something you invest in - as if it would bring you great returns on your money later on.

A car is a thing that you buy because you want or need it, not a thing you buy to secure your cash in something which is tangible and that is going up in value.

As I’m leaving the mindset of the indebted and finally seeing life on the other side of the spectrum - a life of having money and saving it - I’m realizing that to be wealthy, we need to shift our thinking.

Buy Now, Pay Later

We are trained to think of buying anything big as a two-step process: buy now, pay it off later.

The problem with this model is that in order to pay later, we have to incur debt, on which we will pay interest. So that $400 iPhone charged to your credit card becomes $458 by the time you pay it off, and your car “worth” $16,000 when you buy it new is worth $10,000 when you’re done paying it off, and you’ll have paid somewhere in the range of $3k - $5.5k in interest on top of the principle balance of $16k. You paid $20k for a $10k car? That is ridiculous!

Instead, I propose a new plan. This plan has been practiced for centuries, and has been proven to let you finance anything you want, without paying interest. The plan?

Pay Now, Buy Later

I know - it’s unheard of in common society. But think about this…

It’s only a little shift. What you’re doing is deciding to have the thing you want at the end of financing it, rather than at the beginning. All you have to do is silence the demanding little child inside of you who wants everything NOW, and you’ll be able to finance anything without paying interest. :D

We’re caught in a mindset where we think of everything in terms of the payments. We’re caught up in the “I can afford the payments” train of thought.

Most financial councelors will try and teach you to stop thinking this way, but I propose something else:

I want you to start thinking this way, only stop buying.

If you ever hear yourself saying, “I can afford the payments!” get proactive! If you can afford the payments, then start making them - to your savings account. If you are comfortable with a $400/month car payment, by all means, make the payments. Keep your current car and start your savings on a schedule, just as if it were the car bill each month.

In relatively little time, you will have enough money to buy the car you can afford - and genuinely afford it! No more paying $10k over the value of your future car. You’ll pay face value, and pay no interest.

But I Want Something Better!

Don’t we all? There is nothing wrong with wanting to move up and up and up :) Let’s say that you can afford $400/month car payments, and the car that you want is $16k. I know, you’re thinking, “… that will take me 3 years to save up for!”

I propose that you move up in increments - you don’t have to drive your El Camino for three years while waiting for your $16k in savings. What you need to do is move up in baby steps. Set yourself a goal of getting a better car every six months (if you’re impatient!). Here’s how this would look:

  • In 6 months (at $400/month savings), you’ll have $2,400 saved up.
  • At 6 months, you sell your crappy old beater car for $500, making your savings total $3,100.
  • Using the $3,100, you buy a decent older car.
  • At 12 months (6 months later) you’ll have another $2,400 saved up.
  • At 12 months, you sell your $3,100 car (hasn’t gone down in value in just 6 months), banking $3,100 - bringing your total savings to $5,500.
  • Using the $5,500, you buy a slightly better used car.

In one year you’ve moved up from a $500 car to a $5,500 car - without paying interest! All you did was pay yourself $400/month in car payments. After 3.3 years from your start date, you will have worked your way up to that $16,000 car, which I know you won’t be buying NEW because you’re smarter than that ;)

In 3.3 years you’ll buy a three- or four-year-old car that looks and feels brand new, and is worth $16,000 (which mens the new-to-you car was really worth around $20,000 brand new, but you didn’t have to suffer the deflation!).

If you can’t afford $400/month, this plan will take longer. But you’ll get a newer car every 6 months! That has to be encouraging.

My Plan

This is how I plan to buy everything from now on. I am going to try my best to never finance anything eve again - to someone else, that is. I am currently financing a motorcycle, although I think that once I have the money, I may not want the motorcycle, and will save for a Smart Car or similar for later on :mrgreen:

I’m learning, and I hope you’ll join me. If you can afford the payments - make them! The only difficult part about this process is delaying your gratification until AFTER the thing is financed. But I think you’ll find, as you begin to practice this method, that you’ll only want a handful of the things you originally wanted once the money is saved up.

And isn’t only buying things we REALLY want something we all wish we did better?

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May

6

Reminder to Submit Your Snowflakes!





I will be hosting the Carnival of Snowflaking #3 here on Thursday!

As I mentioned before, we need participants! We’ve got a few great submissions already, but if you’ve written about snowflaking in any way in the past week or two, why not submit the article? The worst it could do is get you some traffic ;)

The submission page is over here, and if BlogCarnival gives you a hard time, follow these alternate steps for submitting. Thanks, everyone!

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May

5

Get Serious: How to Save Money, Big and Small





Piggy Bank!For some of us, saving is just not second nature. Unlike some of my friends online, I am not a natural saver - I prefer to spend. And while I am working on that (ahem) and learning to curtail my eager shopping habits, I’ve come up with a couple of ways to hack myself into saving.

If you have trouble saving money, or keeping money saved, here are some ideas for you! They work for me :)

Big Chunks of Cash

How much can you save? This is all relative to your earning power and how little you spend, and of course depends on whether you have debt to pay off or not. But assuming you have no debts running up interest at a heart-stopping rate, how much can you really save?

Even if you don’t have a lot to sock away each paycheck, surely you can save something. Even $20 a month will add up over time. To get the biggest lump sums of money into your bank account, I recommend setting up plan for yourself - officially - for how much you want to save.

1. Pay yourself automatically, and first. Set yourself up a calendar online, or on your computer, phone, iPod Touch… whatever. Set up an alert every month that reminds you to save. Treat this alert as a bill, and pay it accordingly. If you save regularly, just as you pay bills, you’ll get a nice flow of deposits to your savings account building up in no time.

2. Take any “windfall” money and put it into savings. This means your tax rebate, your “economic stimulus” check, birthday and holiday money, work bonuses. Any large amount of money that you receive is above and beyond what you would normally expect to earn, and therefore shouldn’t even touch your checking account. Chuck it into savings and you’ll have that much more!

Little Bits Here and There

With my family and friends, I am now notorious for my snowflaking abilities. Little bits of money here and there really DO add up! Even if it seems like nothing now, later you’ll see the totals in your savings rise. Here are the things that I do to save all my pennies and dimes:

1. Enroll in an automatic savings plan with your bank. I use the Keep the Change program with Bank of America. For every purchase I make, the difference between the purchase amount and the next whole dollar is transferred to my savings account from my checking account.

That means that, for example, if I buy a pack of gum for $1.30, Bank of America takes $2 out of my checking account - they pay $1.30 to the merchant where I bought the gum, and the other $0.70 to my savings account. I use my Visa Check Card exclusively (I just never have cash) and so for me, this means an automatic savings of around $15/month. Pretty good “accidental” savings!

2. Tip yourself. If you carry cash all the time, set up a tip jar for yourself ;) When you do something that gives you warm fuzzies, skip the pat on the back and tip yourself instead. I had a dream about this the other day (yes, I am crazy). Every time that you do something that’s been on your to-do list for ages, write a flawless email, get a raise, contact a friend you’ve not spoken to in a while, find a way to please your children… whatever! This may seem a little strange, but shouldn’t you be paid for all your awesomeness?

3. Save the difference you save. This is a popular debt-snowflaking concept, but it works just as well for saving snowflakes. If you find a way to save money on something - groceries, gas, movie tickets, wine… anything - put the difference into savings. If you don’t want to transfer little bits of money every day online, keep a little notebook at home where you can put in your receipts. Many stores conveniently put the “total saved today” at the bottom of their receipts, which make this very easy to do. If you keep a notebook, you can transfer total savings once a month, or once a week - whatever works ;)

4. Solicit money from people when appropriate. Yes, I am serious. I honestly never know what to tell people to get me for my birthdays. Ever. If you’re the same way, tell them that you’d just prefer cash for your savings goals. Some people hate giving cash, so you’ll always get a few gifts, but others are relieved when they find they don’t have to shop for you! If they’re wary of how much you want, just cut your average gift price in half. If people normally would spend about $20 on you, ask for $10. All those extra moneys go straight to your savings account, pronto.

5. Get silly about it. If you have a talent, practice on the street with a tip hat at your feet. If you have an unused skill, offer to let other people use that talent for a nominal fee - this works especially well if you’re good at ironing or sewing, things that people need done but aren’t willing to pay more than $5-$10 for. And who says you can’t be 35 and have a dog-walking business on the side? Or a lemonade stand? (OK, maybe the stand would be a little creepy… but you could mow lawns!)

Keeping Your Paws Away

Once the money is piling up in your savings account, it can be tempting to spend it. But you must resist! The best way to avoid spending the money is to store it a step away from you. Put your money into a high-yield savings account with somewhere like ING or ETrade. Your money will start earning your interest and you’ll have to take just that one extra step to get the money out for use, which means you’ll be a lot less likely to spend it in a lapse of sanity and self-control. Goodness knows I’ve done that before! Avoid spending your hard-earned savings by putting your money in a remote bank.

If you keep your money a little out of reach, you won’t be able to grab for it at any old time - allowing it to grow peacefully just a little beyond your absolutely-convenient grasp.

Got questions? Leave ‘em in the comments!

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May

5

Oh my goodness! CoPF wins at everything.





The 151st Carnival of Personal Finance went live today at US News. I have to say that this carnival by far exceeds my expectations every week, with this edition being no exception. Bloggers - take note: this is the most easy-to-read and manageable carnival I’ve ever been listed in… we’d all be wise to learn to organize like this!

My article How To Extend The Life of Your Mac Computer was featured in the Shopping and Spending category. Hooray!

If you’re visiting from US News, welcome! If you’d like to be a part of the Antishay community, feel free to subscribe to my email updates for free, or sign up for my free RSS feed. Thank you for stopping by!

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May

3

WWSD#7: Saving Like Crazy, Investing Advice, and Life After Debt





Hey all! Happy Saturday :D It’s noon and already Sean and I have run numerous errands and are now done for the day. We are so productive ;)

I got a couple of great questions on my last post, Getting Out of Debt is So Much More Than The Money. I thought I’d answer them here because they’re both topics I think you’ll be interested.

First, an excellent financial question: Zach at Pennywise and Poundfoolish asked:

erm. . . what do you do if you were never in debt in the first place, but you don’t have the skills to invest wisely? One good thing about being in debt is it allows you to be much more creative with your money and time and assets.

Myself, I’ve never been able to amass any *real* wealth. I wish I could do that.

Zach, your attitude needs to be the same as that of someone deep in debt who’s fighting their way out. The passion I spoke about is what you need to harness - the principles are the same in either case. Let’s say you want to save up $10,000. I would just treat your savings goal the same way you’d treat a debt goal, and imagine that you have $10k in debt, which is really just your savings goal.

It’s good that you’ve never landed yourself in debt, but living paycheck-to-paycheck and knowing that you can do better are just as bad. This is my opinion, and it’s strong, but I think it’s also right.

You said, “One good thing about being in debt is it allows you to be much more creative with your money and time and assets.” True, but what on Earth is stopping you from being creative with your money, time, and assets now? Nothing, except your brain :) I would have you impose on yourself the same restrictions and new policies that I would suggest to you if you were in debt:

  • Cut out unnecessary spending
  • Reduce all bills where possible
  • Be frugal in everything you do
  • Find extra jobs and work to snowflake toward the savings
  • Sell everything you don’t absolutely need for more snowflakes
  • Continue to try and earn more money and spend less every month to keep your snowball growing

These guidelines will get you out of debt, but they’ll also get you saving as well! Granted, you won’t feel the immediacy of debt pressure to get you moving, but you can impose small goals on yourself to keep yourself anxious to meet them. I would set weekly or bi-weekly goals for yourself and tell everyone that you want to save X ammount by ____ date. Telling other people will pressure you into doing what you aimed to do :)

Regarding investing, I wouldn’t worry about that just yet. I still don’t understand a lot about investing, and although I’m now saving instead of paying off debt, I still skip most of the posts on investing in my Googe reader. I just don’t care yet, and I honestly don’t think investing has to be as complex as some people make it. If you learn the basics, you can learn the more complex stuff as you go along.

When you start saving, there’s no reason to start investing right away. The best investments (such as Vanguard index funds) require a minimum of usually $1000-$3000 to open up, anyway. So perhaps you set your goal there, and while you’re earning up that money, learn more about investing. Set yourself a goal of saving $3000 by the end of summer to buy into an index fund with.

There’s not a whole lot you need to know about investing, in my opinion. If you learn about mutual funds and index funds, you will be good in my book. I don’t recommend investing in single stocks, or moving around your investments much, either. Invest for the long term, and invest wisely in funds with long track records and that’s as much a guarantee for good performance as you’ll ever get in the stock market.

If you’d like further explanation, just let me know! I’m sure I can think up more answers to any piece of this advice that wasn’t explained in detail :D

And now for a me-tidbit, My Daily Dollars asked:

Congratulations on wiping out your debt. How are you going to celebrate when it’s finally official?

Yay! Well, for starters, I’d like to call Dave Ramsey and scream my debt freedom to his millions of listeners. After listening to all the awesome screams over the last year, I want to be part of the fun! And I worked my tail off to get here, thinking all the while how cool it would be to call in and be debt-free myself, so that will be a little dream come true for me :D

I’d also like to buy a few more pretty pieces to put in my wardrobe. I think everyone knows that I have WAY too many clothes, most of which are embarrassingly expensive and from Prada and Gucci and the like. But they’re gorgeous and will last me a lifetime as long as I keep them nice (and I do).

The Dresses!I went to Old Navy this morning because Sean needed pants, and they had some lovely dresses out. My favorite piece of clothing is the summer dress (I have dozens), and I seem to always grow tired of them after a few years. Long story short, I bought two dresses this morning. With my DEBIT CARD! In CASH!

As I was checking out, I had this huge smile on my face and Sean and the cashier lady were both like, “…?” I said, “This is the first time I have ever shopped at Old Navy and not used my Old Navy store card!”

Then Sean explained that, “She just finally got out of debt, so she’s like this always now. It’s a whole new world for her.” Awww! I love Sean.

The cashier lady thought it was cool that I had just got out of debt, and that makes me proud. I hope that my positive attitude and enthusiasm can help others see how great living debt-free is - and maybe I can change the world, one person at a time. </pipe-dream>

I plan to save for a motorcycle next. But as Sean said, once I have the money for it, I might not want it. He pointed out that the wanting makes the thing more exciting, and that’s why now that even though he has all the money to do it, he won’t buy a Mustang to fix and fancy up. It was his DREAM when he was in his 20’s, and now that he has all the money, he doesn’t really care to do it.

He said, “It’s like, shit, I just saved up all the money. Do I REALLY want to spend it on THAT now?” I suspect I may feel this way when it comes to buying a motorcycle, but maybe not.

So my first goal is to save for a motorcycle and gear, $3500. Whether I spend that or not is up to the future me, so we’ll see. After that, I want to save up an $8500 six-month contingency fund, and then I’d like to save for a trip back to Italy - where a little piece of my heart waits for me to come find it again. *sigh*

After that? EARLY RETIREMENT! I hope to have $400 - $500k in the stock market by the time I’m 35, at which point I have no idea what I’ll do with my life.

At least, that’s the plan so far ;)

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Filed Under just my life, money and finance, random tips/advice, what would shanti do? | 6 Comments 

May

2

Debt-Free Fridays!: Geting Out of Debt is So Much More Than The Money





Moneys!I’ve received a few comments lately asking me to detail HOW to get out of debt. There are loads of great resources out there, so the topic has already been covered extensively. But since I’ve been asked, I’d like to give you my take on the process. For me, getting out of debt was far more a shift in attitude and mindset than it was about the money.

I’ll remind you all that I’m not actually out of debt yet. I still have $750 on my last credit card - but it’s all just numbers. I’ve earned the money to pay that off, it just needs to come in and then I’ll be officially out. I expect that this will happen in the next week or so, once checks are received and deposited and I can transfer the balance online.

Passion

The first thing you must do to get out of debt is get serious. And I don’t mean just making a budget, or saying that you want out. The difference between the phrases, “How do I get rid of this debt?” and “How can I pay off this debt?” is not small. You must, first and foremost, acknowledge that you are in debt and nothing but paying it off will get you out. There is no magical solution - sending money to the debts is the only cut and dry way to make the totals shrink.

You must decide that there is nothing more important to you than getting out of debt - not social life, not television, sleep, or your car. You must decide that this debt is the only thing you care to focus on. There is immense power in laser intensity and focus.

When I decided to get out of debt, I canceled the cable and Netflix. I turned down the thermostat. I stopped hanging out at bars and clubs every weekend. I didn’t renew magazine subscriptions when they came due. I switched to a (painfully) limited plan for my cell phone. I stopped getting manicures and haircuts. I quit buying makeup, snacks that weren’t necessary, eating out, and I quit buying books every week.

The sacrifices didn’t end there. The biggest sacrifice I gave was my time and space. I allowed my best friend to move into my apartment with me and take up all of the space - just to split the rent. And I started working extra wherever I could find it. My typical day in 2007 was working 8-5 at my day job and making websites from 6 to midnight. That was my life. I had no free time, but the money started to come in.

Compassion

You have to forgive yourself for getting into debt. There is something to be said for having a positive attitude (which I know I have heaps of), and being down all the time because of the debt only makes the war against it more exhausting. In the third installment of my series on my debt story, I wrote:

By making a plan of action to get out of debt, and honestly sticking to the plan, I allowed myself to be okay. I forgave myself for getting into debt. Every morning in the mirror I would say to myself, “It’s okay that we’re in debt. Now we’re getting out of it, and everything is going to be fabulous.” Honest to God, I said these words every morning. By letting myself off the hook for being so stupid before, I was allowed to embrace change and the possibility that things were getting better. And I stopped beating myself up over a past filled with bad decisions that I could not change.

You must forgive yourself, and encourage yourself, and love yourself. This is a long process of righting what you did wrong. If you give yourself a little love, you’ll find it that much easier to continue working hard and paying off the debt.

Hard Work

There is no magical solution. One in a million of you might win the lottery, or get an inheritance, but don’t bet on it. The only way to pay off your debts faster is to make more money and spend less money.

To spend less, you will have to work hard on yourself - learning to give up luxuries that you once thought were staples. And you will have to find ways to entertain and please yourself that are free or very inexpensive. You need to be creative and clever - find ways to spend less on everything, find ways to conserve what you have and reuse what can be reused. The default to buy new all the time has got us stuck in an endless loop of consumption that must end! If you figure out a way to heat your apartment less, or to spend less on groceries, or to have free fun - you’ve just won a little battle in the war of debt repayment.

To earn more, you will have to work hard at jobs. If you get a promotion at work, great! But it’s not likely to happen every month. To earn more money NOW you need to think outside of the box. You will have to find ways to use every last minute of your time making money. Start snowflake businesses and be serious about promoting them. When you get a job, do 200% of what’s expected and you can guarantee you’ll get repeat customers. I said above that you have to sacrifice - and your time is something really worth sacrificing here. Make more money in any way you can think of. Taking on a part-time job at Subway is an idea.

Participate

I know many of you out there are doing this already (you’re reading this blog!). Communities that have your best interests in mind will keep you encouraged and excited. I found bliss in reading debt-reduction and frugal blogs over the last year. Get involved by commenting and reading. Participate in forums. Read books on personal finance, listen to Dave Ramsey, talk to people in chat rooms. Talking and reading about money and debt-reduction will keep you fired up and eager to participate in the collective bettering of all of the participants.

I read The Total Money Makeover in January, four months before when I had planned to be debt-free. There was no reason for me to read the book - as an avid Dave Ramsey listener I was already well aware of the Baby Steps and all the info he preaches. But reading the book was my way to yet again fire myself up to KEEP GOING! Having someone tell you that YOU CAN DO IT over and over again is a sure-fire way to keep motivated :)

This is all just my perspective, but I’ve been through it, and I did it! I honestly think that getting out of debt has far more to do with how you treat and talk to yourself, and how you manage your life, than it has to do with money. And although money helps, earning more money alone will not ensure that you get out of debt. When I got a raise before, I just spent more! Only with a good attitude, determination, and discipline will you actually get out of debt.

If you’re looking for more reading about my journey with debt, I wrote a three part series on my entire debt story when I started this blog. The first part - Stumbling Into Slavery - will take you to the second, and from there to the third. I’m proud of these posts, not only because they were some of my first, but also because I think they genuinely reflect what I went through over these last few years while paying off debt.

Good luck!

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Filed Under debt-free fridays!, money and finance, self-help, what would shanti do? | 5 Comments 

May

1

Happy RSS Awareness Day!





As if May 1st isn’t enough holidays already, the internets have decided that it’s RSS Awareness Day as well ;)

RSS Awareness Day

You can click on the image above to learn about RSS, figure out how to use it, and learn why you may want to give it a try.

Simian Uprising put it best:

RSS is what happens to the web after we stop wasting our time and get down to business. It’s like if we all got our news on differently shaped cue cards and someone offered us a magazine instead. At first you’d think “oh, but I like the colors on the cue cards” and “this paper is boring, it all looks the same”, but pretty quickly you’d realize how much more convenient it is to carry the magazine, and how much more time you can spend reading the stories in it rather than organizing your cue cards.

If you’re not reading in RSS already, why not give it a try? All blogs offer RSS, including this one! You can RSS Imagesubscribe to Antishay Ventenne by RSS by clicking here, or by clicking on the icon that looks like this orange one (right) on any blog. Happy reading!

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Filed Under site news | 4 Comments 

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