Frugal Bachelor

Everybody's talking at me.

2009-09-01T20:20:00.000-05:00

Everybody's talking at me.
I don't hear a word they're saying,
Only the echoes of my mind.
People stopping staring,
I can't see their faces,
Only the shadows of their eyes.

I'm going where the sun keeps shining
Thru' the pouring rain,
Going where the weather suits my clothes,
Backing off of the North East wind,
Sailing on summer breeze
And skipping over the ocean like a stone.

Survey: lifetime investment return rate

2009-07-15T21:17:00.001-05:00

According to all of the investment dead trees and various blogs, the stock market returns 7% (or whatever ridiculously high rate they claim it is) compounded annually over the long-term.

But I wonder how many people actually have achieved this type of return in real life?

I have invested a total of $124,250.90 in the stock market, since 2001, dollar cost averaging every paycheck and never selling an investment. I have followed all of the rules, I never buy individual stocks, have never sold, and everything is in low-cost index funds. My portfolio is roughly 50/50 mix of S&P 500 and EM.

My total stock portfolio as of today (a day when EM was up 4%) is worth $122,774.90 - that includes all gains, dividends reinvested, minus fees.

That means that the total compounded annual growth rate for me has been -0.15%. Over 8 years, I have less than I have put in. Of course, the exact figure is not really accurate, as it assumes I would put in all in at once 8 years ago, where as I have gradually put in year by year (harder to compute), so the actual return is a bit lower than that.

I would have been much better off if I had never touched stocks and put my money into bonds, or even CD's. If I hadn't been in EM, I would have been much worse off. EM is what has saved my portfolio, making up for the horrible performing S&P 500. My money would have been much better off under my mattress than in the American stock market over the past 8 years.

My speculation is that the hypothetical 7% return rate applies only to portfolios designed after the fact (to demonstrate that it would have been possible), and very few people actually have ever had such a portfolio, and most people don't perform close to that. Yeah you would have earned 7% if you invested a lot in 1965 and cashed out in 1995, but how many people actually did that?

Question: how much has your own portfolio returned over your investment career? I am interested in seeing stories of how actual people have performed in investing (positive or negative), the blogs contain nothing but theoretical scenarios which bloggers read in library books, and not true life stories. I want to see how regular average people have benefited from investing in the stock market, I do not care about how the fat cats on Wall Street did, I want to know how actual middle class people have done.

Conquering the World on a Budget

2009-08-25T20:08:00.000-05:00

We have convinced ourselves that it is better to reduce our wants to the point where we can happily acquire everything we could possibly desire. I am becoming more convinced that if I have everything I want, I just don't want enough.

It is very easy to be satisfied on very little, all you need is food, shelter, and entertainment and you will be happy. I'm sorry to report that the more deeply I examine it, the less impressive I find a life of domestic idleness, particularly from a financial perspective.

I look at hobbies such as -

Archaeological Digs
Space Tourism
Motorcycle Adventure Racing
Piloting a plane across the mountains
Safaris through Africa
Expeditions to Antarctica

There are plenty of ways to spend less money on all of these hobbies, but not to the point where they can be reasonably considered frugal. The party line on the blogs would be to pitch a tent in your backyard, make bologna sandwiches, and enjoy a staycation. You can say that travel in general or adventure generically can be made cheap, which is true. I can hostel around the entire planet and barely spend peanut shells, but that is a tiny subset of what travel (let alone, living) is about; I would miss tons of potential experiences doing only that.

We view folks who need expensive things as gluttonous, self-indulgent, and weak in self-control; we have figured out how to be happy on just a little bit.

But either people who spend money on these things are wrong and are wasting their money, or we are wrong saying they are a waste of money. Few of use have ever experienced these so who are we to judge? Our budgets do not even stretch far enough to purchase the boots needed to get on the bike.

By creating a budget we are effectively drawing a line on how much we can do with our lives. I'm becoming less convinced this is how humans were designed to live. But on the other hand I do not want to do all of the work which would be required to support a more demanding lifestyle.

Recent Market Gains

2009-08-22T19:55:00.000-05:00

It seems a lot of people are now coming out of the wood work and proudly proclaiming how they were smart and bought into the stock market when the S&P 500 was at its bottom of 666.79, now it is over 1000, they gained 50% in a few months. Usually they quote whatever the DJIA numbers although I think S&P 500 is more representative of what people own, I don't think many people own DJIA funds. To some extent, this gloating seem hypocritical because it is mainly the same folks who advocate long-term investing (translation: short-term gains are irrelevant and not to be celebrated), and also some of the activities smell like market timing to me.

I have a few questions for these folks who bought in at 666.79:

How did you know that 666.79 was the bottom? How did you know it wasn't going to go to 566.79, and how did you know that 766.79 was not going to be the low, or even that 1166.79 would be low. I seem to remember a lot of people saying sub-1000 was a once in a lifetime buying opportunity, but it did go much lower.
Why were you sitting on so much cash at the time? Why wasn't it already in the market? Where did the money you invested come from?
What do the recent gains mean for your long-term goals? Are you celebrating them?

I also put did put a lot of money into this period myself. My investments are largely emerging markets which have a slightly different dynamic than S&P 500 (they crashed harder, bottomed earlier, zoomed back faster, and seemed to have peaked earlier also). To answer my own questions:

I didn't. It just coincided with the period when I was maxing my 401(k) which I was doing for no other reason besides I wanted to get it out of the way early in the year so I could use money later in the year to take vacation or spend on other things. I am dollar cost averaging so I bought at 666.79, but I bought a lot at 766.79 and even 1166.79 also.
I wasn't. I never cashed out of the market and never shifted money between cash and stocks. All the money I put in was new money which I earned from my job.
Nothing, which is why I'm trying not to get too excited about them. I am more paranoid than ever. I have been investing for 8 years so the amount of money I've put in this year is only a small portion of what I have in, the gains between March and August don't mean that much for my overall position. Anybody who has been in the market since before it started to tank one year ago is down, the only people who are up overall are market newcomers.

In other words, I guess what I'm saying is that I'm not that impressed with people who bought in at the bottom, and are now gloating. To the extent that I did, it was luck. For others who did either it was luck or really smart market timing. Others with very similar timing strategies but who were just slightly off didn't get the same gains. Probably they are being mostly quiet now, they don't want to admit they made mistakes, although their stories probably have more teachings than the success stories.

When I was first starting learning about stocks - during the dot-com bust of 2000, I didn't understand why stocks were falling so quickly. I thought people would want to buy them I asked my mentor why not. He told me, "Nobody wants to catch a falling knife". I didn't understand this at the time, but now one decade later I understand, it feels horrible to put money into the market and see your accounts fall by more than you put (like September/October of last year), and feels good to pump money in and watch it grow. I am sticking by my strategy of continuing to put money in, even though the stock market causes significant emotional turmoil for me personally.

My One Liter Life

2009-08-18T20:43:00.000-05:00

As I dig into my minimalist life, I think I need the following possessions:

Passport
Passport Card
Yellow Fever Immunization Certificate
Driver's License
Birth Certificate
Credit Card, Debit Card, two ATM Cards
USB Flash Drive
A few thousand USA dollars in cash
Digital Camera

None of that is strictly necessary, and much of it is not even my property but owned by the USA State Department or the various banks, and could very easily be replaced. The USB flash drive is my life, contains all of my personal data, and scans of important documents (all two of them). I should keep a copy online. The camera is not needed but it is fun to take pictures, and it fits so why not. Within a couple of years hopefully I can have a computer, cell phone, and camera all in one device the same size.

I created a prototype and all of these things easily fit into a 1 Liter zipper bag. I don't have any USA Dollars so I substituted various India Rupees, China Remnibi, and Mexico pesos, and various other banknotes which I do have. I put 100 bills. The maximum you can legally take into/out of the USA and most other countries is USD$10,000. That is one hundred $100 bills. If you use €500 Euro notes you only need 15 bills.

Ironically, most of this stuff is among the oldest and grossest stuff I own. My passport, issued in 2003, is very musty and smelly, and I believe the oldest thing I own, and also the only book which I own. And the cash is just truly disgusting. I hate my passport, and I think the Passport Card is the future of travel, but currently the only place it is recognized is USA/Mexico/Canada land border crossings. Of course I believe electronic cash is the future although that is not currently feasible in third world countries.

Things like clothes and personal toiletries are cheap and can be purchased anywhere, they are not worth weighing me down if I can only bring 1 Liter. I can rent time on a computer at an internet cafe anywhere in the world. This would be practical if I had to evacuate due to local disaster, or if I wanted to completely reset my life. If I had 5 liters, I would also have a couple external hard drives (mainly music & video). I have a few terabytes of data, it worries me how to transport this, right now that much data requires a lot of space.

If I had a carryon (the limit is currently around 45 liters) I would also take some of my favorite clothes and powerful laptop. I thought it was also interesting to figure the volume of my current dwelling (around 180,000 liters) and a 2,200 square foot McMansion (around 600,000 liters). And I'm about 80 liters.

I don't own many sentimental items. I have a shirt from a night club, with my name embroidered, which the owners of the place who were my friends made for me, two weeks before they were assassinated outside their home. However, I have never actually worn it, and I cannot really envision any situation where I would. I look at it, and I could easily have it remade if I needed to. It's just stuff.

Experiences: The New Status Symbol

2009-08-17T06:54:00.000-05:00

End of Materialistic Status
The material universe described in personal finance blogs is completely foreign to me, the world of being surrounded by buying bigger and better things essentially has never existed in my life. Maybe this used to be done in the USA East Coast or the USA West Coast back in the 1980's, but I have never been exposed to it. In my universe, corporate executives drive 20 year-old pickups, and I cannot recall a time in my life where I ever felt peer pressure to purchase a material thing, or envy because somebody else had something nicer.

The tide has turned, 10 years it was possible to get into debt buying things, but since then China has joined the World Trade Organization, slashing the price of everything manufactured, everything went online, it is much harder to get into debt buying things now than it was 10 years ago because everything is much cheaper. Having a bunch of stuff is no longer a status symbol, people now know that things are just cheap junk imported from somewhere, and it is no longer meaningful to load up on it. I cannot really see anybody impressing anybody today in 2009 when a thing, those days are over.

But people still need to show the world they have greater means, so how will they do it?
Now you have a whole new generation of people getting into debt buying experiences. People load up their credit cards with US$5000 trips to Europe and trying to outdo their online friends by going some place more exotic, more beautiful, and more luxurious.

I know it because I did it! I pissed away every penny I earned in my 20's jetsetting to locations all over the world, always in search of a new place more inaccessible, and further away.

Do I regret it? No.
Do I recommend it to others? Not really.

Internet Status Symbols
There is another significant cultural change which has happened in the last 10 years which makes experiences much more of a status symbol than before: The world has shifted online. Our internet presence is now a big part of our identity, and you can't show off your stuff on the online. But you can show off your experiences, you can write stories about adventures, and other people will read them and comment on them. Before you took a few snapshots of your vacation and showed them to relatives visiting during the holidays. Now people go off and do something and they report back by showing off videos and photos, frequently slickly polished to show off even more, not just to friends and families but anybody who will care to view.

I read a lot of online forums and blogs about travel and a bunch of other hobbies. I see a lot of people who travel a lot, and always come back to report about their travels and how it was bigger and better than ever before (basically, because they spent more money). These people's financial situations are unknown to me, maybe they have much more money than me. Finances just aren't discussed, often the biggest players always complain they are broke. While I certainly could afford to do this (without dipping into savings, or going into debt), my thinking is to instead save that money so I can save for something bigger and better in the future. I figure pretty much all niches on the internet are similar, there are online forums and communities for every interest today.

Inspiring Online Envy
There are a lot of people online who seem to spend an awful lot of money basically trying to impress strangers on the internet with their experiences. Going off on a diving trip to Belize and coming back and posting a bunch of exquisitely produced HD videos about it so you can brag about it on the internet is the 21st century equivalent of pulling up to the stop light in your fancy Italian sports car thinking you are impressing strangers. I think a lot of people go off and experience a lot of things, not so much for their own enjoyment, but just so they can make other people on the internet envious. They pump up what they do just to impress other people, not to make themselves happy.

Honestly, I see a lot of people online who make me very jealous. They are jetsetting to Brazil or wherever every other weekend. I used to do this, it was what got me into debt. It feels great to come back and be able to write on the internet and be the envy of all your online friends, but now I know better. How am I supposed to respond when surrounded by such people? "Sounds fun! I could afford that too but instead of spending all that money myself, I'd rather sit at home and put that money in my 401(k), and maybe when I'll retire I'll be able to do that too." No, that doesn't work in any world except for a personal finance blog. Past experiences you may have don't give you any currency because they are so 2006, and are considered dated, plus you didn't capture it using all of the current equipment. The whole thing is frustrating. What is a frugal bachelor to do? Maybe I am just jealous?

The personal finance blogs are a unique sanctuary and the only place online that I know of where you become more of a legend by spending less and having less. And the only place where I am superstar (at least in my own mind). Honestly, I find this world very comforting. I have taken a lot of the personal finance blog wisdom for granted, but trying to impress others by outspending then is definitely very much alive and well in 2009; it has just shifted from the material world to the virtual one.

GRS Auditions, Round 2

2009-08-16T18:43:00.000-05:00

I thought this was a tough week for the Get Rich Slowly auditions. The first round was pretty good, but I was really disappointed this week.

Jason: Zzzzz …. Make some controversial statements about a hot-button issue. I'm not really buying it.

Neal: went from wearing a suit to blogging about his suit. Complete and total trainwreck. "I’m a bit of a people pleaser by nature." - duh, we already knew that. Stick to blogging about mutual funds.

Lynn: I fell asleep while reading this one.

A.J. Clark: Yawn...

April: I was looking forward to this one all week since I liked her first post. This was not as good as her first entry, but it wasn't bad. It was an intro article to something I already know about, so it wasn't very useful for me personally. But I think she has potential, and I still like her.

Baker: I like him, but I just didn't get this one at all.

Karawynn: wins "most improved entry of the week", definitely better than the first one, but still not really good enough.

I guess anybody can write one really good post, but not everybody can write one week after week, let alone every day. I now have a whole new appreciation for professional bloggers. Imagine the stress that would be involved in having to write one or more good blog entries every day, just to put food on the table. At some level the idea of outsourcing blogging as I suggested last week is totally unworkable, because anybody who is a good blogger can just go independent where they will make more money. They don't need to work for an owner who is taking profit from the top. This is probably why there is so much difficulty in finding a staff writer - the best candidates are already taken, and already own their own blogs.

The best post on GRS this week was JD's post about clotheslines. I hope he comes back and starts blogging full time again, because I miss his blog, and now I am having a lot of trouble envisioning a "post-JD" GRS. I have no prediction any longer what will happen next, or who will be selected.

My Next Plan

2009-08-14T22:29:00.000-05:00

It has been pretty easy for me to get into a steady state. You know, the bills get paid, I never go to bed starving, and am pretty much interested and happy with activities during the day. I'm saving money. None of these are challenges for me any longer. I've had some fun this year. I went to Germany and the Netherlands, I went several times to Mexico, and also to Thailand and the Philippines, and if I don't cheap out I will go to South America next month. However, not enough excitement, and I'm feeling a little bit bored.

I need a bigger challenge. I am an introverted person. My biggest fear is that I will move somewhere and then spend the whole day inside because it's nice and comfy inside. This is not good for me, so I need to live in a place where it is 26°C, with a cool breeze, bright sunny blue sky, and minimal precipitation, all year long. One of the discomforts about travelling is not speaking the language (fluently or at all). In some place like Europe or South America where I do not particularly stick out and people just start talking to me, on the subway or wherever, and assume I am local. It makes me feel dumb. I don't even like being in Australia, I assume people there have a good impression of me until they hear my USA accent.

Which turns me to look at the Subcontinent. No place in the world is anything like India. I can not walk down the street in India without everybody knowing I am a foreigner. I am the center of attention everywhere I go, everybody treats me like a rock star, and makes me feel good. This is great. India is my favorite country on the planet.

Last weekend my alpha Philippines girlfriend frantically IM'ed me and told me she needed to talk to me right now, she was going to get married to a German guy. I believe, but am not sure, that USA guys are held in higher esteem internationally than German guys, by the ladies, (and really higher than any other nationality except Japanese). But I guess being in the Philippines is more appealing than being here. She thinks I left her because I didn't go back there. I think she left me because she wouldn't wait for me. I thought I was too smart, too cold-hearted, and too invincible to fall for the charms of a woman, but I was completely wrong, now I know I am dumb idiot, confirmed she just wanted to marry anyone. If I had gone there it would be me getting married to her.

I have made the decision that I want to move in with a woman. Not for long time, but maybe a month. Once the Shanghai Composite reaches 4500, maybe 5000 to be safe, I am going to move to South America (specifically Pereira, Colombia), rent a two-bedroom condo downtown, and then select a local lady who meets my specifications, and take about a month with her. I want to take her biking through the Andes. And then move to India to earn rupees for a year or so, while she tends to the condo. Then return to South America, and see if she is still waiting for me or has married another guy. I think India would be a good place for me to spend a year. It is not common for foreigners to fall in love with local women there, unlike the other countries which I approve of. This is my current thinking, but until Shanghai reaches those levels I will still be here. Given the recent performance it might be for a long while.

Where Everybody Knows Your Name

2009-08-13T20:24:00.000-05:00

Do people find value in personal relationships with retail establishments, such as shops, restaurants, cleaners, banks? Are there any businesses where you can walk into and they know your name and what you want?

There are only a few businesses on the planet where the people know my name. Even something like the cleaners which I go to every couple of weeks, the same lady recognizes me but never remembers my name, although some other customers she greets by name when they come in. Good. This is how I like it. Even for things like the bank, I do my banking at a large national chain. However there are a million branches in town so I can go to a different one each time. I used to go the same branch all the time, but the girl who worked there got to know me, and it creeped me out. Now I go a different branch. There is one national clothing retailer which I like, however there is only one location in town and the same saleslady attacks me every time I walk in and remembers me, which annoys me, so I go there much less frequently than I would otherwise.

When I go to conduct business, I do not want to know people, I do not want to make small talk with them, I do not want to be treated special, I don’t want to be known as a regular, I don't want them to know what I'm up to; I want to walk in, get what I need, and then leave. For all they know I am just passing through town. I used to go to the same sandwich shop almost every day ordering the exact same lunch for a year or two, and they never remembered me or what I ordered; I try to be nondescript and blend in.
This is part of the reason why I prefer chain stores to local businesses. Whenever there is a choice of patronizing a business with one location, or multiple locations, I will choose the one with multiple locations. The one place people always remember me is in Latin America, I do not understand why they do, but they always do and it bothers me much less than at home. If I didn't know better I would have thought they think all USA people look the same. I can walk into a little cafe in Mexico which I haven't been in two years and they will remember my name, what town I am from, and what color taco sauce I want.

I do not understand why some folks prefer businesses where everybody knows their name. It seems like this can only lead to problems, and I don't see any good that can possibly come out of it. Maybe they will forget exactly how you want it, but if you ask for it every time just like the first time they will do it right. There are also some businesses which falsely remember you, such as the oil change places which greet you by name once they run your license plates. That is just an insult.

Depending on Everybody, Relying on Nobody

2009-08-12T21:23:00.000-05:00

One of the things which is part of the mainline frugal/simple living ethic which strikes me as madness is the support of local production. For production to be cheaper locally means that the cost of transporting the product to the destination must be greater than cost difference between producing it in a more optimal location and producing it locally. There is almost nothing which is cheaper to produce locally (for values of 'local' which are within the USA), at least assuming the very sub-peak oil energy prices which we enjoy today.

Consuming Globally

If the doctor who cures cancer is here, then I would get treated here should I develop cancer; if she is in India, then I will fly there for treatment. If there is one in both, then I will find out how much a plane ticket costs and see which one is cheaper overall. One of the costs of local production which does not get fully factored in, is the degree to which it is holding the local community back. The chance of the cure for cancer being discovered here - and the chance of the next bioengineering powerhouse being created in town to create thousands of new highly skilled, high paying jobs - is reduced if the local labor force is bogged down by picking berries, refinishing furniture, and weaving baskets. When you hire a local worker to do mundane work, not only are you putting the ceiling on the potential of someone locally, who could be doing something more important, but you are also basically putting someone else on the planet out of work completely. No, the labor standards and environmental standards are not equivalent across the planet. But they are rapidly improving, and I do not believe punishing the workers by not supporting their goods and services is the right message to send.

Instead of wasting our money on vocational training, we should figure out how we can send this type of work to the 1+ billion living in rural China, the 1+ billion living in rural Indian Subcontinent, and the 1+ billion living in rural Africa. My local community is uplifted if all of the routine work is done elsewhere; then we can concentrate on the bigger picture and solving the more important problems. Work which can be done more efficiently elsewhere should be done elsewhere. Every effort should be made to offshore and/or automate as much work as possible, and significantly expand immigration when it is not. Location is becoming less relevant; we should be thinking about how to expand wealth globally and work together, which we can jumpstart by giving people jobs, instead of putting up barriers and hoarding all of the work for ourselves. I am a citizen of the planet, first and foremost, and I want the whole planet to be better off, not just the area I live in which happens to have some arbitrary line drawn around it.

Borderless Economy

I do not like the idea of tying my future to any one entity. Picture yourself buying all of your food from local farmers. What will you do if there is a drought? Suddenly your world is thrown into chaos. How many human lives get lost in areas which depend on local food production and then get struck by famine? We still let tens of millions of our brothers and sisters die every year of starvation, although the rate is lower than any point in recorded history; even though the world population has doubled in the past half-century and quadrupled over the past century.

I buy my food from the grocery store. I do not care if something is coming in from Mexico, Florida, Thailand, or Ecuador; the grocery supply chain is figuring out where the best place to get something is and continually monitors, adjusts, and negotiates. This is happening behind the scenes, by people who are paid to worry about such matters. I cannot do that myself. It would take a pretty major global event for all of the production to freeze up to such a degree that the grocery stores shelves would be empty. There is no question that it is possible, but it would only take a minor and localized blip for your farm to dry up.

Relying on Nobody

When a product starts to disappear from the market, I wonder why. There are only two companies which make men's shoes in the United States; 98.5% of shoes worn in the USA are imported. I look at the these numbers and they amaze me. Yet year after year, there are more different styles and types of shoes available than ever before. There are hundreds or maybe thousands of companies which import shoes made elsewhere. This to me is a sign that American shoe production is dying, but yet my choice in shoes in general is getting much larger. It therefore seems to me, to be a somewhat bad idea to become attached to American brands of shoes. Whenever I get attached to some special product which is getting harder to find, chances are it will eventually vanish completely, and I will be disappointed. I can minimize the impact of this happening by spreading my purchases all over; I buy from everywhere, depend on everybody, so that I do not have to rely on anybody.

Being a Better Blog Citizen

2009-08-11T21:30:00.000-05:00

Some people may say my blog is irrelevant, since I have not made enough money to quit my day job (or even enough to buy a cheeseburger), or because I don't have 100,000 subscribers. Well, I am part of the blogging community. So are you, and it is our duty as participants to be better blog citizens. The reason I started my blog was to help other people, the reason why I continue to be involved in blogs is because I care about blogs. 99.9% of people involved in blogging never earn one penny, they do it because they care and are passionate, they do it to have fun. Blogs have given me a lot, I try to give back to the blog community by contributing blogs posts and comments to other blogs. The whole world of blogging is profound and amazing, there is huge network of people and you can express yourself to people all over the planet, you can have a voice and reach people, as a reader you can find new ideas about anything. This world was unimaginable 10 years ago.

Some people say there is a glut of blogs, I say there can never be enough blogs. The whole point is democratization of the printing press. I think everybody should start a blog and post their ideas, I don't know of many instances where enhancing the free flow of ideas hasn't made the world a better place. It is very easy to start a blog, it costs no money, and it doesn't take a lot of time to write blog entries. Maybe you only publish one entry a month, but it is interesting. Then you are doing better than a lot of bloggers who post copycat schlock three times a day.

I think the blogs can be a better place, I think there are things everybody can do (both bloggers and readers). Most articles about better blogging essentially boil down to whoring yourself out, and I don't think that makes blogs better. Here are suggestions I think which I think people who are bloggers and readers, including myself, can do to make the blogs a better place:

Be Challenging: Point out blog flaws, and poke holes in arguments, and push the human knowledge base farther. Call out contradictions and inconsistencies. Be polite and civil as appropriate. As a blogger I am here to learn, the truth is frequently ugly and painful. Tell bloggers when they are doing good and when they are doing bad. The best commenters on the blogs today are folks like Johanna on TSD and Tyler Kara-however-you-spell-his-name on GRS because they are insightful and frequently entertaining (two years ago it was Minimum Wage). If you are a blogger, then challenge your readers, don't pat them on the back just because they read your blog.

Be Different: you are a unique individual, so why does your blog or your comments look and read just like the rest of them. Be up front and show why you're different, otherwise you are just another joker in the crowd. Highlight your differences, the world does not need more of the same. The best articles on blogs, and what differentiates blogs from generic magazines, is the personal touch. I want to see how you handled a certain situation, I want to see what your dreams are and how you are going to follow them, I want to see how you are going to conquer the world. I read your blog because I want to learn what you are all about, I don't care what "they" think, or how "they" did it. There is also way too much group think on the blogs, if you have the balls to stand up and tell us why we are all wrong, at least you make us think, even if we don't agree. Don't be different just for the sake of being different, though, because that is lame and I can see right through it every time.

Be Yourself: Expressing yourself is just about the only thing that you can do better, cheaper, and faster than anybody else in the world. Your blog is all about you, you are the boss, and you are in charge. Real people make mistakes, and nobody is perfect. If you tell us everything is going great and nothing ever goes wrong, you don't sound human. Likewise, bloggers who constantly repeat the exact same mistakes over and over sound just like they are catering to others searching for solutions to common problems. Don't tell me what I want to hear, tell me what you want to say. Don't be a constant downer either, I don't read blogs to make my day go badly. People have good days and bad days. If there is a constant dark cloud over your writing, maybe you need a psychiatrist more than you need a blog.

Link to Good Entries: as a reader, I pretty much know about all of the big blogs and subscribe to them, it is more valuable to me if you link to somewhere off the beaten path which I wouldn't have seen otherwise, instead of the same old blogs. Regular round-up posts are mostly a waste of time, because exceptional blog entries do not come at a rate of 5-10 per week, and often are not discovered until months after they are published. Most blogs just link to other articles in their blog network, but they need to do better. It is a lot of work to reach out and find something new.

Break the Rules: if you obey all of the published "10 Rules to be a better blogger", you will end up with a clone of whatever blog published that article. If it was that easy there would be a million blogs which are all the same. Most blogs follow a formula, but there is no formula for blogs. Put all of the rules (including all of mine) into one list, and break all of them, and you are not finished until your blogging provider sends you a letter about violating their terms of service agreement. Or maybe you are an orthodox saint and you don't believe in breaking the rules. That is cool, too, so just be yourself.

Help new Bloggers: if you see a new blog which is just starting off and looks promising, help them out by linking to them. It gives them a boost and increases the chances they will be around for a while instead of another abandoned blog.

Nuke the Ads: the ads on your blog are ugly, text ads are usually the ugliest. I do not want to see ads for blue pills, yellow teeth, or blotchy white stomachs while I'm reading your blog. I do not want to see ads in your RSS feed. I also do not want to see ads which appear to be spying on my browsing history, I do not want to see ads related to products/services you write about, I do not want links on your site which are affiliate links (which just make you look like a cheap hooker). If you tell me to turn off the TV because of advertisement exposure, and you put an ads on your blog, then you are a hypocrite. The few dollars you may make from small-time blogging are not worth selling your soul for. If you are a reader and you agree, show your disapproval for abusive advertising by selectively using ad filtering software as appropriate. Look into other ways to make money blogging besides ads. You have to be innovative.

Grow & Develop: if you want to keep me interested in your blog, you have to grow. If you keep recycling the same posts from last year, or keep blogging about how you continually repeat the same mistakes, never make progress, and do the same thing every day, I will wonder why you bother, and if you care about what you are blogging about. If you are a slacker, I want to hear how you are slacking off more than you were last year. Don't be stagnant. Surprise me.

Make Reading Easy: If are a blogger and you put the first few words of the article on your front page and make me click through to read the full article, then I will not read your blog - period. On some blogs I cannot even find the articles and there is just all sorts of random junk on the front page. If you are a blog reader, and you agree with this (or whatever sufficiently annoying feature you find on the blog), send the message, tell the blogger to fix their blog, and stop reading it until he does. Blogs are all about sharing ideas freely, don't put your message behind links and make it hard to get to. Hiding your message behind a wall goes against everything that blogging is all about.

Make Commenting Easy: comment moderation is annoying, but I understand why it's done. If you have full moderation on, then your blog must be exceptional for me to comment. If you have a long list of rules which I have to obey in my comment, then don't expect me to bother (probably you don't want me to comment, anyways).

Be Happy and Have Fun: Some people take blogging too seriously. Don't worry about the numbers, and instead define your own metrics of success. Relax. Have fun on your blog, then log off and do something else for a while. There is a whole world out there and go off and embrace it. Blogging is not worth it, if it's not making you happy.

Minimalist Lifestyle

2009-08-10T21:41:00.000-05:00

I learned last week that "simple living" does not really accurately describe what I'm searching for, a more accurate term would be "minimalist lifestyle". This term is not widely that widely used, and I think conveys what I want better. Here is what I see as the minimalist lifestyle:

Fewer Things:
Some people make the goal to fit all of their belongings into the trunk of a hatchback, a carryon, or whatever. These are all worthy goals. My personal thinking is to fit everything in my life into a 1 Liter zipper bag. There are fewer blogs about this topic than there ought to be. Most of the simple living blogs and decluttering don't really address this topic as thoroughly as I'd like. One of the classics in this topic is The 100 Things Challenge from Zen Habits.

Reducing Ownership:
I don't want to own anything, and anything I own requires maintenance, which in turn requires more things to own! Ownership is snowball. Think about it. If I own a car, then I also have to own some basic tools unless I want to have it to bring it to the shop all the time. I don't want to own the tools, or the car! Maintenance of a house requires a huge array of tools, which themselves also require maintenance (lawnmower, chainsaw, sprinklers).

One way to combat ownership is to rent. Renting my dwelling instead of owning it also includes maintenance of it, so it drastically saves on the amount of stuff I have to own. I also believe that unless I use something constantly it is more economically efficient to rent, because it can be shared, and used by other people. It doesn't make sense to own something I use once a year.

Stuff is getting cheaper to make due to automation in manufacturing, inexpensive labor due to globalization, and advancement in synthetic materials, so owning disposable things is one way to reduce ownership of things. Instead of purchasing expensive dishes which I have to wash and maintain, I can look at purchasing disposable versions.

Outsourcing Everything:
One of the advantages of outsourcing is that I can eliminate the ownership of some piece of equipment. If I send all of my laundry out, then I don't need to worry about the (maintenance, efficiency, costs of) the washing machine, dryer, detergent, fabric softener, iron & ironing board, and so on. I don't have to worry about the price of any of these things, and I just look at the price of the final bill, which I can compare to the other service providers, to see who's cutting the costs the most. It's someone else's job to worry about how to achieve efficiency, I am the boss and I just tell them to get the price lower.

I can also minimize the number of skills needed to function. Who has the energy to be able to understand how everything works any more? This seems to go counter to most expressions of "simple living" I have encountered, which are more about living in a self-contained island where you do everything yourself, live off the grid, and avoid contact with the outside world. That's the opposite of what I'm trying to do. I think I will be able to do much more with my life if I am not bogged down with the details of living every day.

Embrace Technology:
Generally speaking, technology make things easier to do, and enables all sorts of possibilities which were unimaginable before. A digital camera means eliminating a dark room and a cupboard full of smelly chemicals; a portable music player eliminates shelves full of compacts discs, vinyl records, and sensitive audio gear. This does not necessarily mean going off and purchasing a bunch of gadgets. I like to learn how people in developing countries use technology; for example, in many countries people can't afford to use their own computer so they use shared computer in an internet café and put all of their own stuff on a flash memory device which they take with them.

Minimize Commitments:
There are 6.7 billion people on the planet so for whatever it is I want done, everywhere there is always someone willing to do it. There are quadruple the number of people as a century ago, and it is also is far easier to connect with them than it was before. Commitments are messy when they end (lawsuits and fights) so one alternative is just to avoid getting into them. This is more realistic proposition than a decade ago. Technology has revolutionized human relationships. People who I develop friendships with in the real world (such as in school, or neighbors, or while traveling), I can move anywhere and still keep in touch. Also for more specialized interests I have, I can reach out and meet people regardless of where they are.

Also I want to stay healthy enough so that I don't need to take any medications (I learned this one from Jacob @ ERE). I want to avoid being dependent or addicted to anything. Also, I think it is a good idea to avoid developing a taste for 'weird' things, such as only being able to eat some sort of exotic Japanese fish which is only available from one store on the USA West Coast. I want to be able to sleep on the floor of a noisy bus station, instead of requiring an expensive mattress. I don't want to special order my meals, I just want whatever's on the menu. People are too picky. By keeping my mind open, I can be happy with whatever is available.

Why this is all appealing to me ...

Increased Freedom - I want to be able to get on my horse and ride off into the sunset whenever I get bored, or feel like it. This is easier to do if I can pack everything I own quickly, keep in touch later on, and don't have commitments to sever.

Increased Choice - I want to be able to live anywhere. I want to be able to hit the ground running wherever I land. The amount of adventure and possibilities on this planet is amazing, minimalist living makes it easier to move and to take on any activity without less important things getting in the way. I see this as a key difference between simple living, which seems to value reduced choice.

More Frugal - most (not all) of the lifestyle choices I'm thinking result in spending less money. This means ability to work less for shorter time and enjoy life more.

Less Worry - Maybe not less, but redirected to more important things, to the bigger picture. The only way to eliminate worry would be to withdrawal from life. But instead of worrying if I'm paying too much for groceries, I can instead worry about how I'm going to conquer the world.

Risk Aversion - I'm spreading my risk around, so I'm not tying my life to one building, one person, or one country. If a hurricane or drought strikes, I can go to wherever there is a harvest.

GRS Auditions, Round 1

2009-08-09T17:59:00.000-05:00

Unless you have been on Mars for the past week, you have been devouring the first week of audition posts at the #1 personal finance blog, Get Rich Slowly. Here are my reviews of the ones for the first week.

Baker - fresh, cool, hip, young cat, who in a lot of ways is leading my dream life, and inspiring envy. JD eats up anything "international", although Kiwistan barely qualifies as foreign living. Would make a great addition to GRS; he is almost everything that JD is not, although a little rough around the edges and may need coaching to polish up and make more accessible.

Karawynn - Yawn ...

April Dykman - hit the ball out of the park with the first post, and definitely the most GRS-like. Being female definitely puts her at advantage, and she is the best writer in the group. I'm not convinced she could consistently turn out such high quality, (although I don't doubt either), I just need to see more.

A.J. Clark - Zzzz… student debt bloggers are a dime a dozen.

Lynn - Move along, nothing to see here.

Neal Frankle - guy who wears a suit, the reason JD needs him is because he is CFP. Problem is, his writing is boring, not even in a smug/arrogant way, but just corporate and soulless. Reminds me of Jon Katz. He managed to squeeze a comment out of me, though.

Jason Barr - He seemed a little bit too straight for me, also GRS-like but lacking a certain character and wit I would expect. He has potential, and also squeezed a comment out of me, but he is fairly generic.

I think JD is looking for the following in order of priority:

With Children
Female
Young (20-something)
Investment Knowledge
Non-USA

My prediction is that JD selects 2 or 3 (possibly 4) people in order of probability: Baker, April, Neal, & Jason. There will be another round of auditions next week.

I feel that the introduction of regular staff writing into GRS is a significant, and game-changing move in the personal finance blogs. I haven't seen this done on another blog. My prediction is that JD goes mostly into a manager/owner role, mostly steps away from writing much on GRS himself by the end of the year, and lets his staff writers take the spotlight and develop big. This will free him up to move on to bigger and better things. It also suggests consolidation in the blogging industry. I don't think it will have any impact on small independent blogs, but I think it could impact some of the top 10 bloggers as eyeballs get increasingly focused on a few big blogs instead of little blogs spread all over. I also doubt TSD will change anything, since Trent seems to prefer to do everything all by himself, and has almost no precedent for employing any sort of guest writers. In any case, sounds like lots of changes coming up, which should spice up the blogs a little bit, and make them better and more interesting.

This is not your father's Planet

2009-08-07T21:15:00.000-05:00

My father told me to work in an office, so I went to school and got a job at an office.
His father told him to work at a factory, so he moved to the city and looked for work at the factory.
His father told him to work in a mine, so he headed west and signed on with a mine.
His father told him to work on the railroads, so he worked on the rails across the country.
His father told him to work on a farm. Buy a few acres, grow corn, and you will be set for life.

Every generation thinks they know what is best for their children, they think they know the inside secret to prosperity, but they are wrong and a little bit behind the curve. Because everybody is passing on the same "secrets". The world changes too fast; what is the exact number, something like 50% of jobs available today didn't exist 5 years ago.

If I had a son or a daughter [*], I would tell them to work in biotech, a field which the world is aching for, and one which will render the medical profession as we know it today entirely obsolete within one generation. But after that period of time, it will be a solved problem. I have no idea what will be the next big career will be after biotech.

([*] The ladies have had it even crazier. No woman in my lineage ever worked prior to my own mother, she has told me that while growing up the idea that she would someday support a family would have been completely absurd. As fundamental and basic as it seen today, the broad entry of women into the work place, which has profoundly propelled the planet forward, is a very recent development. Only 1-2 generations, in which time women have gone from largely not working to being genetic engineers and DNA researchers, solving the most advanced problems in the universe.)

The average length of a career is a little bit longer than the duration of a generation, this makes for an interesting dynamic. You have people fresh from school who are eager to change the world, working side by side with people who are getting ready to retire and want the world to stay the same.

I think people are economically unproductive once they get older. People pretty much get lazy, they are too slow, fat & happy, out of touch, and can't keep up. Older people can give presentations and create plans, but they can't do real work with the savvy and passion and skill of a 25 year-old.

You can look at Japan and the average age citizen is 43.5
In Germany it is 43.0.
In USA it is 36.6.
In China it is 33.6.
In India it is 24.8.

I look at these numbers are they are mind boggling, and have profound implications regarding future global economic order, India is one generation younger than Japan and Germany. Within 10 years the global workforce will be completely different, within 20 years it will be unrecognizable. Work will drift from the aging countries to the younger countries for the simple reason that they are where the labor force is. You also have immigration amplifying the generation gap, because you have the previous generation stuck in the old world with the traditional ways, who would be completely dysfunctional in the new world where the next generation is.

Conquering Frugality

2009-08-06T22:17:00.000-05:00

Some people comment saying I am not frugal. Actually, I am one of the most frugal bloggers in North America, as measured objectively by absolute number of dollars spent (outside of hardcore guys like ERE). Although I write about $400 shoes, that is a purchase which fit into my budget because I spend almost no money, and even with that I still spend less than most. I blog about all big purchases I make, you see them all, but rarely because I hardly spend money. The sum total of everything I have purchased over the past few years (besides clothes & food) can fit into a 1 liter zipper bag.

I have had the same budget for the past three and a half years - $1800 US / month. This has served me well. I do not categorize any further besides rent ($800) and other spending ($1000). When I run out of money, I do not spend any more, it is very simple. I have kept the amount of money I have spent exactly constant over the course of paying off debt, stock market losses and subsequent gains, rainy days and bright sunny days, $4.00/gallon gasoline to $1.50/gasoline, strong US dollar to weak US dollar.

However, I do not think about frugality that much, it has become second nature to me. Since I have spent the exact same amount of money every month for more than three years, the amount I have available to spend is innate and intuitive to me. It is manageable to me, and it does not require significant planning or thought. I am also not trying to decrease my spending. I'm very happy with how much I spend. It is enough to live quite comfortably, without feeling gluttonous, and also enough that I can save money.

This is why my blog is not filled with all sorts of tips to save money. I have passed the point where I am thinking about how to squeeze extra pennies out of a bottle of laundry detergent. At some level, bloggers who have been at it for 2-3 years who suddenly break out a post about how they just figured out how to save a bundle on eating out, or whatever, confuse me, because I wonder what took them so long. You should be able to master most fundamentals of frugality in about 3 months. And after one year, there shouldn't be a whole lot of groundbreaking new surprises. You can't decrease your spending forever, eventually you will reach the limit.

Frugality is the most important way to improve your financial position. For people who are looking to decrease their spending, the best thing to do is figure out how much you are comfortable spending, and then only spend that much. What comes next? Stop worrying so much about how much you spend, be happy, and live a good life. My blog is a chronicle of someone who has already been living frugally and not somebody who is just figuring it out for the first time.

Conflict Between Simplicity & Choice

2009-08-05T22:31:00.001-05:00

I am not a particularly good decision maker, I often feel bombarded by choices. Sometimes I feel that too many choices are making life too complicated. There are plenty of us seeking "simplicity", I do not know what this word means any more, or if still means anything, and I do not think it is really what most people are looking for. It may conjure up visions of life off the grid, living with less stuff, location independent lifestyle, and plenty of other ideals. An alternative way to define "simple" would be lack of choice.

In the future, everything is simple, mechanically; you can have anything you want at any time and it is delivered to you instantaneously, it is created by computers & machines, and technology yet to be conceived. You don't have to worry about how it is made or how it is delivered. In the future, in a world of abundance, how is a less interesting question, and has been entirely replaced by what.

You can look at telecommunications in the early 21st century. Now getting in touch with people is no longer a problem, you can communicate with anybody on the planet anywhere at any time. The number of people you can converse with instantaneously measures in the billions. This was not possible 10 years ago, and if you dial back the clock two hundred years ago, the number of people you could communicate with was measured in the dozens. If you wanted to deliver a message to somebody who lived on a different continent you would have to sail across the ocean, or if you wanted to chat up someone who lived in the mountains you would have to climb up the mountain (which, as simple as it sounds, was itself much more complicated 200 years ago than it is today). But, it no longer matters where someone is, you just put their name into your handheld device and you are connected instantly, technology has broken down barriers and has completely changed the rules, and it will continue to fundamentally alter the course of human civilization at an accelerated pace.

What this means is choice. Now when you need to talk to somebody it doesn't matter where they are, technology has completely revolutionized the world, now deciding which of the 6.7 billion people on the planet to talk to is a bigger problem than actually connecting with them. 200 years ago if you were sick you would have to send smoke signals to summon the local village shaman who would perform magic healing potions, now you choose which one of millions of medical specialists all over the planet to work with, each of which has access to more than the total sum of human medical knowledge from a decade ago. What's for lunch? Now the decision of which of the 1200 restaurants serving up 85 different ethnic cuisines which you can drive to and back during your lunch hour, is a bigger problem than sharpening the machete to behead the chicken, figuring out what fuel you will use to boil the water, or how the recent precipitation patterns are affecting the rice crops; the processes which go into preparing a meal - once mankind's sole purpose - are no longer relevant for human beings working outside that field. You can look at any industry, the amount of choice which you have in every detail of your life is dramatically higher than it was 10 years ago, we live in a totally different era.

Choice is the opposite of simplicity. Do you want more choice or less choice in your life? The simplest possible life would be to be a prisoner, locked up in a metal cage. You do not have to worry about where your next meal will come from, where you will sleep, who you will vote for, what you will watch for television, when you will take a break, or which of the 600 different brands of bottled water at the grocery store is the most pure. All of your decisions are made for you. You can look at people who lived 10 years ago, or people who live in less free states today, and compared to our society they are effectively imprisoned, the choices we have are unprecedented and unequaled. If you were born in a coal mining village in Kazakhstan, your life is simple and you don't have a lot of choice, you don't have a lot of decisions to make, and your future is largely laid out for you. In 10 years, when technology marches forward one decade deeper, and human beings further conquer and control and liberate themselves from nature, we will look back on our quaint lives in 2009 which will appear relatively imprisoned.

There is a continuum between simplicity and complexity, the further you simplify the mechanics of things and services, exponentially more doors open up, the more difficulties and complexities you face as an individual, and the more decisions you will have to make. We live on a planet where I now have to seriously consider what country I live in, what profession I take up, who I spend my life with, how I fill the time of my day. These are not questions my father had to answer, or at least, not on the same scale. But this is no longer my father's planet; in a world where more resources become less scarce, and individuals cooperate to open possibilities and potential to all of our brothers and sisters and not just the wealthy, and abundance becomes democratized and free, acquisition of goods and services becomes streamlined and less of a worry, it means that we will have more difficult choices to face on an individualized basis. Human freedom and leisure are undergoing an unprecedented revolution, the biggest problem facing humans will be simply, what'll it be today? I think all of these choices should be cause for celebration, I for one am willing to put up with a few more difficulties as long as it means further freedom and choice.

Full Moon Market Anxiety

2009-08-04T21:33:00.000-05:00

I have earned much more money in the stock market in the past 4-5 months than I have in my whole life, this makes me feel nervous. I thought it would make me feel secure, but it does not. The only asset which makes me feel secure is diversified international cash. All of the stock market gains and then some can be erased be one day. Does investing in good times take more of an iron stomach than in bad times?

The Shanghai Composite is now 3400+, this is double what it was less than a year ago, the money I have poured into this has doubled over the past year. I put a lot in between November - February, it has treated me very well.

Just a few weeks ago, my total lifetime investment returns were negative, now they are positive. I can't believe how much my net worth has increased in the past couple of months for doing nothing but getting a good night's sleep (Shanghai opens after I go to bed, and closes before I wake up!) This puts me ahead of pace for all of my financial goals.

It all seems too good to be true, it does not seem real. The Chinese stock market bubble is the talk of the investing world, everybody thinks it is overpriced and time to cash out. Back in June, I thought maybe it was time to sell. I did not, and it paid off. I have never sold a substantial stock asset, I am strictly buy and hold. If I did sell, I have no idea where I would put the money.

When the stock market tanked last year, I was angry and depressed, but not anxious because at least it was obvious what direction things were going, but now I feel very insecure. I wonder if a lot of people who learned their lesson last year are thinking about getting out before they lose a lot of money again. I am feeling more cheap lately, I am scared to spend money and I fear all of my gains will go up in smoke, more scared than even the depths of the financial crisis last year. I feel financially defensive and I don't want to lose money again like I did last year.

This article is fascinating, I hope it is wrong, but it is one of the more interesting and well-written stock market analysis articles I've read recently. 100+ million Chinese are pouring money into the stock market, everybody is getting in, and they are already talking about Shanghai at 8000. How can it not be bubble? To me it feels like NASDAQ in 1999. Of course, I believe in the long term, and that's what I'm in for, but I'm an information junkie addicted to monitoring the short-term movements day to day.

Two Year Anniversary

2009-08-01T10:11:00.001-05:00

I am pleased to report that today is my two year anniversary blogging. While most bloggers either quit, sell them themselves out, or offshore all of their work to guest posters, before they reach two years, I am still here and still doing my own thing. I don't think anything can stop me now, and I am pretty sure I will still be around for another year, unless I am either dead or incarcerated.

Thank you for your continued interest.
I also have some good news to share. As you all know, I have struggled with alcoholism for a long time. Around six weeks ago, I just quit, I'm sure that is longest I've gone without a drink, and I have no desire at all to go back. For the first time in my life, I have found peace and serenity without alcohol. I credit my favorite blogger Andy at Hobotraveler, who has been sober for 22 years, for inspiring me and showing that a fun, happy, and adventurous life can be achieved without influence of alcohol. Currently he is in the Philippines studying Tagalog with his Thailand girlfriend, "traveling enjoying the planet while you are tied to your life, an indentured servant of the culture".

My mission remains the same and I'm hoping to retire from my current career in April 2011, and then do something else with the money I'm saving up. Despite the Shanghai Composite cratering 5% a few days ago, my net worth, as of today, is at personal all-time high. Also my blood pressure is at all-time low. Life is good.

Who's Keeping Blogs Honest?

2009-07-22T19:17:00.000-05:00

Today I read an entry on one of the top 10 personal finance blogs, entitled something like "8 Reasons why a Credit Card is Better than a Debit Card", or something like that. I disagreed with the article (I myself am a huge debit card fan), and thought all of the reasons cited were either incorrect or just irrelevant for me.

But, on the left hand side of the blog entry was a gigantic advertisement for a major credit card! I guess it's pretty easy to write an article about why credit cards are better than debit cards, when a big credit card company is paying you to do it. This incident, for me, destroyed all credibility for that particular blog. It is also bad for all bloggers because it calls into question the integrity of blogging in general.

I made the decision a couple of months ago that I'm not going to put any links to any commercial entity in my blog and also not mention any brand name on my blog (which should be true of anything I've written in the past month). I'm taking a militantly anti-commercial approach to my blog, for the simple reason that I don't want anybody to accuse me of being a shill for anyone. I am a back-to-roots blogger, I write my blog to have a platform for my opinion, and that is enough of an incentive for me. Something got lost in blogging, though, with the emergence of affiliate links, click-through ads, and search engine optimization, a lot of innocence was lost. I even saw a blog literally sell itself out last week, which I didn't even know was possible!

I understand that there are people who need to make money from their blog, or else they won't be able to put food on the table, and their children will starve to death. However, there are other ways to make from your blog besides accepting ads (you can accept donations, for example, or sell your premium content). In the interest of disclosure I have never made a penny from my blog in my almost two years of working on it. If Wikipedia can thrive without advertising, then your blog would probably be able to also. I don't have a problem with people who make money from ads on their blog, although I am skeptical it can be done without introducing bias.

Mature media, such as television, magazines, and newspapers (and the online equivalents of all of these) solved this problem a long time ago, and they completely segregate the advertising divisions of their business from the journalism departments. Almost all of the professional bloggers are one-man operations and don't have this luxury. The guy writing the articles is the same guy who is negotiating with the advertisers. How can this possibly not influence the writing?

One of the top commandments of personal finance that you read on any blog is "Only hire fee-only financial advisers". An adviser who doesn't work for a fee is probably taking money under the table from the financial products they are hawking. But most of the people writing this advice are hypocrites, because they are also taking money under the table for ads and affiliate links. How can you possibly trust a blogger whose blog is plastered with ads for various financial products to put together an article analyzing those same products? Whenever I see an article on a commercial blog pointing to a specific product or especially another web site, I treat the article with extreme skepticism.

I think the tackiest thing on blogs is not advertising, but affiliate links. I feel truly dirty when I click through to one, and I feel that affiliate links are truly sleazy and backhanded. Nowadays I inspect any link I click on a blog three times to make sure it doesn't include affiliate information, if I suspect that it does, I will not click on it. If bloggers are getting some kickback from me clicking an ad, they should be up front about it.

The blogs are mysteriously mysterious, although the internet (and especially blogs) are supposed to be promoting the free flow of information, all real data about where a blogger is making money from is shrouded in secrecy. My expectation is that over the next year or two, there will be enough backlash against this to open it up a lot more, a blogger will not be viewed as credible unless he discloses where his advertising income is coming from and how it relates to his content. In the long run, nothing is in higher demand than pure truth.

The best blogs are ones which tell personal experiences, and are primarily for entertainment or for promoting thought. Bloggers who are passionate (whether or not I agree with them) or make heartfelt confessions are more interesting than those who follow the rules and cater to the herd. As for my question, who keeps blogs honest? The probable answer is bloggers and blog readers. Only you can do your part to fight corruption on the blogs, set an example of integrity and honesty. I'm keeping my blog true to its roots, I will lead by example and blog how I believe it should be done.

Recobbling Shoes to save money

2009-07-18T21:58:00.000-05:00

You can get a used pair of decent handmade shoes (such as various American shoemakers, I'm not going to mention any brands lest I sound like paid advertisement) on online auction sites for around $25-$50. These pop up regularly, dozens of new pairs get listed every day. Around 98% of them are junk, but you can find some very nice ones, if you spend some time searching carefully, and there is little competition for them.

Now, for about $100, you can get send them back to the (American) manufacturer, and for that price they will completely resole the shoe, and refinish the uppers. The shoe looks brand new (at least according to the photos on the website), all of the scuffs and discolorations are gone, even the wrinkles get removed and they put them in new box, they look they could pass as new. Alternatively there are plenty of local shoe repair places where you can get this done, which probably is a little bit cheaper, although the replacement parts will be generic and not the original brand.

So for around $150 you get a refurbished pair of shoes which costs $300 or more new, and will last for a long time. I wonder if people have done this?

I haven't done this yet, but this seems like a recipe for a great deal on a pair of shoes. However, many other people are offended by wearing used shoes. Personally I'm not really sure. I don't buy a lot of used clothes myself.

But even if you don't buy used shoes, you could also get your own shoes refurbished. You could wear them for say one year and get them recrafted every year or two, and eternally have new shoes for a fraction of the price of regularly purchasing new shoes.

Somewhere I saw a pair of 40 year old shoes which had been recrafted, and they looked beautiful, perfect, and classic, shoes which I would be very proud to wear. It is also necessary to polish your shoes regularly (I hate doing this myself, but there isn't a service here like there is elsewhere), and also to keep them in shoe trees.

Often the image presented of thrift and frugality (when it comes to clothes) is wearing rags from Goodwill looking like a bum and proudly not caring, here is a frugal and economical alternative, and still be able to look classically stylish if you choose wisely, I think it would be possible to spend less over the long run than if you are buying new $75 rubber soled shoes every year, and you would also look far better than average spending person.

This runs contrary to my disposable, made in China approach to frugality, but shoes seem to be an exception? Good shoes are expensive, so they are worth the labor to repair and maintain, they are not something which you should just throw out. I think clothes in general (particularly outerwear) are something where you can buy good quality and then you can get them repaired periodically and they will last for a while.

Thank you setting me straight

2009-07-10T21:20:00.000-05:00

Well most of you all told me to stay put, for 6 months (a time period which I like), so I will do that. I'm thinking about moving into Extended stay hotel, that way I can have week-to-week rental agreement and sell all of my furniture, plus get internet, cable, electricity, water all included in the rent.

I'll be perfectly honest, I'm a little bit disappointed, and I was hoping you all would tell me to pack up and leave. I can't find a good excuse as long as I have paycheck coming in, but I sure as hell am looking for one.

Honestly, India would not work, anyways, I found out there was no direct flight, and it's not as close as I thought. Maybe some place like Malaysia. Honestly this seems like best option to me, it would put me 2-3 hours away, I could easily visit, and move there w/o making bigger commitment.

No, I don't have any type of paternity test, I researched this and the only trustworthy method is to go to Cebu, but that is not frugal. There is a whole industry I discovered dedicated to investigation and background check of your girlfriend in the Philippines. Also I do have visa for India (which is one of the reasons it is attractive to me), but not for the other countries. And, no, she is not the first woman I have fallen in love with, but the first in about 4 years, also she is different from the other girls. This is my thinking, if not now, when; if not her, who? And the same questions go for seeing the world.

Thank you for the advice, I will follow it, you all gave me a lot to chew on. I am fortunate there are honest folks who I can turn to ask for advice and who tell it to me like it is, and not lie to me like the rest of the world does, everybody else just tells people what they want to hear instead of the truth. Many of you told me to go for it (even ballot stuffers!), I appreciate your encouragement, but I must save a little more money. Trust me, soon I will, and I will revisit the subject in January of the upcoming year.

My favorite blogger Hobo Traveler is in Manila right now, and he is tearing the city to pieces. Every word he writes is 100% true, resonates with me, and perfectly captures the spirit of the places he visits, unlike most other travel blogs which are too eco-touristy and politically correct; I live vicariously through his blog.

Holy Shit - I can't believe what I did

2009-07-05T22:54:00.002-05:00

My apartment lease ends 8/31, and I gave notice to vacate to the leasing company. I do not have another place lined up to live, I do not know where I will be living in 6 weeks.

The last few weeks have been very difficult, I am truly at crossroads. I am facing a large number of difficulties right now, all coming at once. None of which has to do with money! I am under an unbelievable amount of stress, I feel very strong desire to run away from everything and start over.

I have not been thinking straight lately. Possibly I will leave the country on 8/31, either to Philippines, India, or Colombia. That gives me plenty of time to sell my car and get the rest of my life squared away.

I can move anywhere on the planet for about USD$2000, right now I have a little bit more than two bucks US. All of these different countries have pros and cons which I have discussed in detail already, if for any country these are not clear please let me know and I will clarify.

In the event that I leave I do not know what I will do with my job, I may resign or go on leave of absence, I still have a month or so to decide.

I am a bad decision maker, so I will let my readers choose for me. I view my commenters as volunteer therapists, putting my problems on my blog is much easier and cheaper than telling them to my therapist who then afterward asks for money.

Move to the Philippines - go on 20 year honeymoon to Boracay with Christina
Move to India - get corporate job, visit Christina on weekends.
Move to Colombia - whenever I go outside at night like I just recently did, I hear Spanish-language music on the radio, which makes me feels like I am Colombia, riding in taxi during a long night.
Stay in Texas - bring Christina here, or live solo.

You could also vote 'none of the above'. Whatever gets the most votes I will do! At the end of the week I will tally up the votes left in the comments.

Everything I thought I knew is Wrong

2009-06-28T17:19:00.000-05:00

I went to Mexico this weekend, again, and I got raped by the police, again. This time for the offense of being rich foreigner walking down the street of dirt poor third world country, police decided to search me and rifled through my wallet, stole 800 pesos before my eyes and told me to have a nice day. I am very upset and angry. Mexico is probably the most dangerous country on the planet right now, the police are these 20 year-old hoodlums who speak worse Spanish than me but carry M16's and have the right to do whatever the hell they want. There is no law in that country, and I am never going to go back there again.

On the other hand, Mexico is the foreign country which I understand the most, if I cannot survive there for one weekend, how could I possibly aspire to living in places which I don't understand at all for longer period. This incident is the final straw, I'm sick of third world countries, and subjecting myself to needless danger & bullshit, I want to stay in America where everything is perfect. I also realized last month in Bangkok that chasing women no longer is interesting or exciting to me, and no longer brings me joy. Everything I do is with the intention of avoiding commitment, my life is completely reckless and has no direction.

The state I spent the first quarter century of my life is now a foreign country to me, when I go there, I do not fit in, I am an outsider. People dress different, talk different, they are of a totally demeanor. TX is now home, when I travel I am always relieved to come home. While I thought I wanted the traveler lifestyle and have nothing, I now realize this is not at all what I want. I am very happy here, I could not imagine living anywhere else, this is where I belong. Now it's time to become serious about establishing a base.

I think about purchasing an engagement ring and boarding the 9:35 AM flight tomorrow to Manila and knocking on Christina's door, and proposing to her. I don't know how much she likes surprises, but we could apply for her fiancée visa and we could live together here. And purchase an 1800 square foot house in a cul-de-sac and have children. I asked her if she would like to live here, she said yes.

The mind boggles ....

Your House in 2039

2009-06-25T20:19:00.000-05:00

If you purchase a new house, and take a 30 year mortgage, you will be in debt until sometime in 2039. A house is something which you hope will hold its value over three decades, we live a world where change and progress are not constant, but accelerating exponentially. The same world where a century ago, salt was a precious commodity which started wars, now salt is passed out for free. In less than thirty years we went from vinyl LP's to having every performance of every piece of music ever created available in your pocket no matter where on the planet you are, one ten-thousandth the time taken between the discovery of fire, to a method to start one.

The housing industry is stagnant, has made no significant breakthrough in centuries, and needs a gigantic kick in the ass. In 2039, houses will be built by machines - technology to enable this is in development today (do search for 'Behrokh Khoshnevis')

The implications of this are profound and world-changing. Combine this type of innovation with revolutions in materials engineering and atomic scale manufacturing, and the world is a completely different place.

By 2039 the following industries may be eliminated:

Housing construction
Real estate agents (house appraisers, land surveyors, etc.)
All Banking & Finance operations related to mortgages
Home maintenance (plumbers, roofers, electricians, etc.)
Insurance
Home-Improvement industry

If your bathroom sink springs a leak, it will be cheaper to recycle the whole house, and reconstruct the entire thing from scratch, than to call a plumber, or even go to the supply cabinet to get your wrench. No longer will you rearrange furniture or paint a new room to create a new look, you will select a new housing design on a computer display and your house will be converted to it minutes. Have children, become an empty-nester, or maybe just throwing a party on the weekend, you can reconfigure your house all instantaneously. Remodeling projects will go the way of acoustic coupled modems, and real estate agents will go the way of encyclopedia salesmen.

Tens of millions of American workers who currently dedicate themselves to the housing industry will be freed up to work on more important and creative endeavors. The economy will zoom at an accelerating pace like has never been witnessed before in the history of humanity.

Western style accommodations will be built out around the world, and available for everybody, causing housing prices to plummet globally. The newly constructed houses will be better, cheaper, and more efficient than all houses currently standing. Everybody in the world will be able to afford a nice house, they will no longer be limited to the planet's elite. A billion plus people who live in shacks in urban slums, a billion plus people who live in housing made out of mud and sticks will now be on the same level as people in the richest countries. Natural disasters are no longer a problem, because people can relocate everything instantaneously. People no longer need to stick around in rotting cities (such as Detroit, Cleveland, Pittsburgh, etc. are today) just because that's where their house is located, they can pick up and relocate to the boom cities, and let the old cities die overnight.

No longer will the world be limited to the cycle of the 30 year mortgage - it will move to the rhythm of the 20 minutes it takes to build out a totally new city. This will profoundly impact how humans live, and will dramatically accelerate the pace of business, industry, and human well-being, and will make everybody's life better in unprecedented ways. The world in 2039 be unrecognizable and a very beautiful and very rich place which we will all savor.

Wealth & the Cheapening of Society

2009-06-23T19:49:00.000-05:00

I used to understand wealth as people moving up, now I understand wealth as goods/services moving down, becoming cheaper, and more accessible to the masses. The distribution of wealth, and the rise of the 21'st century global middle class centers around making everything more economical. The reason countries like America have moved up so much is not because there was a discovery of a precious commodity such as Gold within the land, it is because everything has become dramatically cheaper for us.

You can look at something like shoes. One hundred years ago, the only type of shoe you could buy was handmade leather-soled shoes. You either had to buy expensive shoes, or you had no shoes at all, which was the norm for plenty of people, even in rich countries. In the past century, everything in the world has completely changed. Now you can buy plastic sandals for $1.00, or cheap shoes made of synthetic materials for $15.00, and witness the result, almost everybody in the world who wants shoes now has them. Hand-made shoes are now only worn by the very wealthy; fewer people have them than they did 100 years ago, but yet we are a much wealthier society! If shoes never became cheap, then only the wealthy would have shoes.

Some folks denounce the cheapening of society, and yearn for the ways of yesteryear. This is true not just for goods, but for services also, which are becoming more automated. When you call your insurance company, the phone is answered by a computer instead a person. You almost never get anything repaired, you just throw it out buy a new one. Everything is disposable. But the cool thing is that whenever something gets cheaper, not only does it open up that good or service to a greater customer based, but usually the wealthy (who were able to afford to original more expensive product), also switch to the cheaper product. The end result is that product takes up a smaller percentage of their budget and becomes less of a problem, so they build more wealth. You can look at a household budget from 100 years ago, and most of the expenditures wouldn't make sense any more.

"They don't make them like they used to" - indeed, but look at the result! Whenever a product is cheapened, it should be a cause for celebration and rejoice, because it just means the world becomes a little bit wealthier. Whenever a Wal-Mart is built, whenever a factory is shuttered and moved to China, or whenever a call center is closed down and farmed out to Indian workers, but best of all when these jobs are replaced by machines, it should be a reason to be very happy.

This trend of cheapening can only accelerate. Housing is an example of something which hasn't changed much in the past few hundred years, but is very hungry for a fundamental overhaul. Healthcare is another. I am sure that the automobile can never be adopted by more than a few percent of the world (due to scarcity of roads & fuel), but maybe something like a self-driving hydrogen-powered flying personal transporter can, and is better than a car! The challenge for 21'st century business is to make everything they create accessible to the world, not just the rich. This is the natural ebb & flow of business. The way to impact the world and promote world wealth (though not necessarily the way to make money yourself) is to focus on the masses. This will create the global middle class of the 21'st century and beyond.