Category Archives: personal finances

2009 In Numbers

Unique visitors to NevBlog according to Google Analytics.

442,307 Unique visitors to NevBlog according to Plesk Stats on my server.

84 Number of posts on NevBlog

5 Days spent homeless.

11,453 Miles put on my car.

87 Gigs of bandwith transferred to HouseOfRave customers.

377,176 Unique visitors to House Of Rave according to Google Analytics.

722,329 Unique visitors to House Of Rave according to Plesk Stats on my server.

$35,244 Amount of money I spent to live.

54 Times I rode the Cal Train

$1,892 Money spent on iPhone service.

1 Time I almost bashed my face in doing back flips on videotape.

Lousy Interest Rates = Spend

When the economy sucks, the government will generally lower interest rates so it’s more enticing for you to SPEND money rather than SAVE.

Well they’ve done that big time right now, and I did a little sleuthing around at some of my non-risk-bearing accounts.
About 5 years ago I set up an Emigrant Direct account because internet banks usually offer higher interest rates than most traditional banks…and I’ve pretty much forgotten about it.
I stashed away about $25,000 in that account and checked it recently to be greeted with:

1.2% annual return??? HAHAHAH!!

This means my roughly $25,000 will earn $300 for a whole year of sitting there. Meanwhile the inflation rate right now is “officially” between 3-4%….and in reality is probably much higher.

So while I earn $300, my money loses $750 in value (at least). The account is no longer a “No risk” account…it’s now a money pit.

Well that’s a losing proposition, so while I already have an investment account I use to throw into businesses that make me money, it looks like I’ll be almost forced to put some of that money to good use.

However with all the current tax breaks encouraging businesses to spend right now, taking money out of permanent savings accounts and spending them on money-making endeavors seems a smart idea right now.

Shopping spree time :-D

To Serve

I’m still immature and am slightly fascinated by monetary success, and was thrilled when I first read about this simple measure of success a while back.

It’s pretty much an easy way to see WHY a person (or organization) has a certain amount of wealth.

Simply look at a person or organization and ask: Who do they serve?

Look at what they do for other people and how many people they serve. Almost immediately it becomes apparent.

It breaks down like this:
Serve few + not valuable work = Little money
Serve few + valuable work = Good money
Serve few + very valuable work = Lots of money

Serve lots + not valuable work = Little money
Serve lots + valuable work = Good money
Serve lots + very valuable work = Lots of money

If you’re a numbers person you can make into a simple mathematic function:
People Served = a
Value of Service = b
Success = c

a X b = c

If you want ‘c‘ to be higher, you just have to increase ‘a‘ or ‘b‘ (or both).

Perhaps it’s easiest to demonstrate with real life examples:

The guy making your burger at McDonald’s:
Makes little money.
He performs a job almost any person can quickly learn. If he cannot show up, someone can easily replace him. Serves one organization and doesn’t serve much.

Cardiac Surgeon:
Makes good money.
Goes through over a decade of grueling medical training to be prepared for any circumstance that arises in their specialty. They serve relatively few people in the grand scheme of things, but they serve those individuals A LOT (he can either save you or kill you). Can he be replaced? Yes. However there are relatively few cardiac surgeons in the general population, so it’s very difficult. This means if someone is particularly “good” amongst their peers they could make quite sizable sums of money for their premium service. Serves few but serves them a lot.

Elton John:
Makes lots of money.
Provides a small amount of service (entertaining them is still serving them) to a large amount of people. Has a unique style, voice and persona that’s nearly impossible to duplicate. Serves a little but serves a lot of people.

Makes lots of money.
Here’s a fun one. Google serves A LOT of people (billions) and provides them a lot of service. Almost everything they offer is free, and it’s almost always a few grades better than competing services that charge money. They provide lots of service to lots of people. It’s no wonder they will make lots of money.

  • So who do you serve?
  • How much value are you providing them?

I bet your answers will clearly reflect your income. For fun, take a look at everyone around you and calculate their incomes using this method. Pretty cool huh?

Since you know this, you can now improve your own outcome (c) by improving one or both of those areas.

a X b = c

Xmas and the Spending Account 2

For the most part you’re going to spend more money during the months of November and December than any other time of the year.

I found this out long time ago in college when every holiday season my Spending Account (explanation of accounts here) would get stretched very thin.

Solution: Spending Account #2

In addition to my other accounts, I created another spending account for myself which would cover only gifts, vacations and general holiday spending. I initially used to just put $20/week (aka $100/month) in this account through automatic transfer. That means during the holidays I had an additional $1,000+ to spend on gifts and going out for the holidays. That extra cash is mighty helpful during these months when spending goes through the roof.

Now I put about 10% of all my income in this account. It pays for vacations and everything without having to worry where I’ll pull that money from.

If I randomly see a great gift at the mall or someone, I can usually buy it without much price consideration thanks to the previous 10 months of savings in the Spending Account #2. Same with hopping on a plane for vacation…the Spending Account #2 takes care of it.

If this season you’re struggling to find where all that extra spending money is going to come from, I’d HIGHLY suggest creating a Spending Account #2 for yourself to make the next holiday season much less monetarily stressful and more enjoyable.