From Rags 2 Riches

I Feel Like I Just Won The Lottery

2012-02-08T01:13:00.000-08:00

A few hours ago (at 7:01pm PST to be exact), I received a job offer for a full time position as a financial representative. I promptly accepted.

I start April 1st, right after I graduate.

Words cannot describe my feelings of happiness right now, so I won't bother trying.

Job Hunt Update

2012-02-01T09:35:00.000-08:00

For the past few months, I’ve been hunting for a full time position to transition into immediately after graduation. I’m hoping to get a jump on the job market, landing myself a job before all the spring graduates rush in. Currently, I am looking for a financial representative position. I’d like to further my education in this area along with economics, but for now, I’m just absolutely sick of school. 16 consecutive years of that crap can get a little bit old. What I’m hoping to do is gain some experience from real world applications before I attempt to test for my CFA (Chartered Financial Analyst) or go after a Ph.D in behavioral economics. I’m tired of studying theory all the time.
A few weeks ago, I made it through the second round interview for a financial rep internship. It was a full time position and although I technically had the title of “intern,” I would’ve been treated as a full time rep (I would get the same training, be doing the same job, and getting the same pay, etc.). It was essentially an introduction to the real job. This company is the largest issuer of life insurance in the United States and so that’s what I would have started off doing; selling life insurance. They gave me a market survey assignment to complete before returning to a third round interview. I was to go and survey people about their experiences with the financial services industry and collect referrals from them. I had to get at least 30 referrals and at least 10 of them had to be from strangers, people that I’ve never talked to before. This collection of referrals would’ve been my starting place for selling life insurance should I get the job, so I really worked at trying to get good referrals, rather than just trying to get thirty names. The job is completely commission based, so I’d only be screwing myself by not getting quality referrals. Unfortunately, I fell just short of the quota by the time my third interview rolled around; I just didn’t have the time to drive twenty to thirty miles out to meet people at that time. I was told that If I didn’t have thirty names and numbers, then there wasn’t any point in returning for the final interview. Oh well, I tried. I asked my interviewer to keep my resume on file and to let me try again closer to my graduation.

Meanwhile, another company that I submitted my resume to also wanted to interview me for their internship, but I couldn’t make it due to time conflicts (their only available slot was during one of my final exams and the location was 60 miles away). Again, I asked them to keep my resume on file and to contact me closer to graduation.

Earlier last week, I got a call from them asking me to come in and interview for a full time position (not an internship). I have about a week left to prepare. I’m stoked. From what I can understand, this job is still going to be 100% commission based, but I won’t be dealing with just life insurance; I’ll be working with other investment vehicles as well. I think. I hope. I’d like to be more geared towards wealth management, but I do understand that this is an all around sales-based job.

Anyway, with that being said, I need to resume my prep work. I’ll kill two birds with one stone and turn that prep work into something useful for the blog. Stay tuned.

Excuse Me, Do You Accept Monopoly Money?

2012-01-22T12:46:00.000-08:00

What has more value: fake money or real money?

Most of you probably said real money, but my experiences have taught me otherwise. Growing up, I observed a strange phenomenon and no matter how much I think about it, I can’t seem to make any sense out of it. Let me lay it out for you.

Video games are great. They’re supposed to be a means of escape from reality because reality sucks. “Life is full of work and I don’t want to work, so I think I’ll play games.” Good so far. Now, some of these games have a currency system built into them (role playing games, or RPGs). That’s fine. What I don’t understand is how for some people the line has blurred and that which was imaginary somehow has become more real than the real world itself.

Why is it that some people feel so much more driven to earn fantasy money than real money? Why are they so much more driven to focus on bettering their characters in a game rather than bettering themselves in real life? It’s gotten to the point where South Korea’s supreme court ruled that virtual currencies are protected just like real money.

Could you imagine how productive the world would be if everyone put the same amount of effort they did playing RPGs into improving themselves or improving society? There probably wouldn’t be any more homeless people. We might even have the cure for cancer. Maybe even both.

Before I go on any further, let me clarify that this post isn’t hating on video games. I bloody damn well love video games. It’s not about video game addiction either. I’m specifically questioning why would people devote more time and effort into developing an in game character rather than developing their own lives. What is it about video games that makes it so much more attractive? And why can’t they take that same energy and apply it to the real world to make themselves better off? I’ve tried to think of a few reasons, but I’m not happy with any of them.

Laziness

I will not blame laziness. Laziness is not a factor. If it were, people would not put in so much time and energy into the video game in the first place.

Video games are supposed to be fun. Grinding (just running around the same area again and again hoping to find some valuable loot) is not. I’ve done plenty of grinding to know how much it sucks. Back in the day I used to play Diablo 2 and 9Dragons for 12 hours a day, doing nothing but farming in-game currency. I wasn’t even really playing the game anymore; I was just watching the number counter go up. After a few years, I eventually grew up and realized this shit was a complete waste of my time. In some games, grinding for loot can be even more monotonous than a real job. The upside of a real job is that at the end of the day you get paid. With a RPG, all you get is a higher electricity bill.

Different Reality

A lot of people play games to get away from reality. I know I do. But sometimes what you end up doing is trading away one set of problems for another. RPG reality also sucks, especially when you first start off. You own absolutely nothing of value and have no friends to boot. You have to work your way up from the bottom. Sort of like real life, no? Interesting psychological phenomenon going on here, escaping one situation only to be placed into a similar one, but instead of real, 3D objects, you have 3D rendering. On top of that you have people that harass you in-game, probably way more than most people would dare to do in real life, since they’re sitting in the safety of their own home, behind a screen, with the anonymity of a username. Then there are the annoying 12 year olds who just won’t shut the hell up.

I suppose there’s the argument that RPGs allow you to embody a character that’s greater than yourself. Maybe. But I’d bet that you yourself would be a whole lot greater if you used the same amount of time improving yourself as you did your character.

Reduced Waiting Time

Video games speed up the passage of time, so maybe people are fulfilling their instant gratification needs. They earn money quickly and are able to make large purchases quickly, something that isn’t easily accomplished in real life.

It may also be because earning money in a video game is a task that does not require much brain power. I’m not saying that it’s easy because it can be very tedious, but for the most part however, there tends to be a set formula. Lather, rinse, and repeat. In real life, it could get a lot more complicated, a lot more unpredictable, which drives people away.

However…

In games with well set up market systems, like Neopets or World of Warcraft, prices prevail just as they would in a real market economy and it ends up taking a very long time to accumulate currency to purchase big ticket items, just like real life. Despite spending half of my day playing RPGs, I managed to accumulate some decent gear and items in game, but I never got to the point where I was considered to be really “rich.”

Ultimately, in most cases, at the end of the day, after the game you are left with nothing tangible. Yet so many people (myself included) are constantly drawn back into that illusionary world. Food for thought.

Sometimes It’s Hard To Get Inspired…

2012-01-11T21:40:00.000-08:00

…And that’s where a few friendly bets come in handy =D

I have been lacking motivation in three areas: writing for this blog, increasing my savings, and finding a job. Tonight, in an effort to incentivize productivity, I have made two bets with a friend of mine (mikE):

Bet #1
The situation: We are both currently broke as shit and we haven’t done a very good job lately of saving our money.
The bet: Whoever saves more money by December 7, 2012 wins.
The reward: Loser owes winner a fancy dinner. The total bill is capped at one hundred dollars.
The rules:
1) We both start with savings accounts that has no money in them
2) Only money that is received from this point on may be added to the savings account
3) Only money that is earned may be deposited. Money that is gifted may not be included.
4) The winner of the bet will be determined by the value of the savings account and the savings account only. No other assets will be included, such as checking accounts, stocks, etc.

Fairly straight forward.

Bet #2
The situation: mikE is a recent college graduate. I am about to be a collage graduate. We both lack full time employment.
The bet: Whoever gets hired for a full time position wins.
The reward: Will be split into two tiers:
Reward 1: mikE has long hair (about neck length) and I have short hair (usually clean shaven). If I win, mikE shaves his head. If mikE wins, I grow my hair out for one year starting immediately from his hiring date, regardless of how long it currently is.
Reward 2: If the loser fails to find a full time job within one month of the winner’s hiring date, in addition to reward 1, the loser will have to wear a dunce cap of some sort with something derogatory on it. Nothing too bad. Maybe. For two hours minimum. In a public place (most likely a bar).
The rules:
1) The pictures will not be posted on the internet (sorry my dear readers).
2) The pictures may be printed and shown to our friends.
3) The pictures may be framed and put up in our homes.

I, Rags, do solemnly swear to adhere to the rules set above and follow through with the consequences should I lose the bet.

mikE, if you agree to the terms above, please make your mark below.

This should be fun. May the best man win.

Carnival of Personal Finance #332

2011-10-24T23:11:00.000-07:00

Want to read more about personal finance? Check out the Carnival of Personal Finance #332, hosted this week by Beating Broke.

Failure Story: 3 Question Long Interview

2011-10-22T03:40:00.001-07:00

I once had an interview for a job that ended after only three questions. This happened two days ago.

Here’s the back story:
This past Wednesday, my university held a career fair. Since I'm going to graduate in March, I decided to hit it up to see what kind of potential employment opportunities were out there for me. I currently want to work as a financial analyst or planner; something that has a lot of quantitative analysis to it. GEICO was there and seeing as to how they’re an insurance company, I asked about any actuary/finance positions available. The rep told me that all of those positions were located in the east coast. For the time being, I don’t want to relocate out of California. As I was about to leave, the rep asked me for my resume, looked at it, and told me that I qualified for their leadership development program, which is a three year training program that rotates you through several positions before finally putting you in management. I didn’t have much interest in it, but the rep told me that was doing on campus interviews the next day and asked if I wanted to schedule an appointment with him. What the heck, why not. I might as well get some interview experience, I thought. So I said yes and walked away with a 3:00pm interview on Thursday.

Thursday came around and I’ve done zero interview prep and zero research on the company/position outside of the online application they have. Once the interview got rolling, my lack of preparation became very apparent. Now of course, I could make the argument that because I’m a student, a one day turnover isn’t a lot of time to prepare and research, especially with all the other crap I have to get done, but I’m not going to do that. I firmly believe that everyone has twenty-four hours in a day and nobody but you decides how you spend those twenty-four hours. Not being prepared is nobody’s fault but my own. Despite only being three questions long, I still learned a lot out of that interview. Here’s a breakdown of what was asked, what I said, how I should have answered it, and why.

Question 1: How did you hear about us?

What I said:
I was looking at the companies that were going to attend the job fair and I saw GEICO being listed as one of them. I looked at the job categories that you guys were hiring for and I saw that finance was one of them and so I decided to come by your booth. Then I met you and here I am.

What I should have said:
GEICO is one of the largest insurance companies around with one of the largest marketing campaigns around. I’ve seen and heard your advertisements on billboards, the television, and on the radio. After speaking with you, yesterday was the first day I’ve heard about your leadership development program, but I’ve known about this company’s existence for the better part of my life.

Why:
My original response clearly portrays a lack of interest in both the job and the company itself. I’m clearly just going along with the flow of events and am applying for the position just because I happened to land an interview. Also, with the way I worded it, my original answer indicates that I have done no research on the company, have never bothered to look them up, and have no idea who or what they are.

Question 2: Which two of our office locations would you like to work at and why did you make that choice?

What I said:
There is an office located close to San Diego, correct? I would like that one. Do I have to make a second choice? Uh, could you give me a list of locations? (I ended up choosing San Diego, CA and Woodbury, NY.)

San Diego, CA:
I choose San Diego because preferably, I would like to stay in California. I like the heat, so it’s an environmental preference.

Woodbury, NY:
I haven’t been to the east coast much and so if I have to relocate, I would like to move to some place new and experience new surroundings. From what I know, New York is heavily populated and so I would like to know what it’s like to be constantly surrounded by people. (This was a complete lie. I live near Los Angeles City and I hate being surrounded by people, but I had to come up with an answer on the spot.)

What I should have said:
San Diego because it is located in Southern California and that is ideally where I would like to stay in as I have lived in So Cal all of my life. I have my family here and many friends as well. In addition to that, I like the weather here in California. I like the heat, but at the same time, if I wanted snow, all I would have to do is drive north 100 miles and I’ll be up in big bear. Or, I can drive west and be in the beach. The autumn weather is nice and cool here as well. I don’t believe any other city offers me such a perfect combination. Also, the heat here is different from the heat located in the other states; it’s much hotter and dryer closer to the mid-west and too humid for me in the east. As for my second city, I would like blah blah blah (I still need to look it up and qualify it).

Why:
At the career fair, I was given a brochure with a map of their office locations. It wouldn’t have been too difficult for me to pick out a second city and have its name memorized. Knowing where their offices are located is an indication of the amount of research that was put into the company. I went into the interview adamant that I was not going to leave Southern California and so I hadn’t bothered to look outside of their one California-based location. This again shows my lack of interest in the company. Also, in my original answer, I failed to properly qualify why I wanted to stay in Cali. The moment I stopped talking after I said I chose California for the heat, I knew I was doomed. There were plenty of other offices located in hot locations, but there’s something about California that I like and I failed to properly communicate that.

Question 3: Do you have any other job applications in progress and why did you choose them?

What I said:
Yes. I am going to apply to __________ located in _________, California. I chose them because they are a financial management firm and they are offering the ideal position I would like to have. They have an internship program within their finance department that they hire out of and I am hoping to be one of the ones selected. I’m aiming to be a financial analyst or financial planner.

What I should have said:
No.

Why:
I didn’t actually have any other applications in progress. He asked me whether I had any applications in progress, not who else am I going to apply to. Also, in the three sentences that I said about the other company, I portrayed more interest and knowledge about the other company than GEICO. Oops. Not to mention that I just outright said ‘I want to work for someone else.’ Now, I was running some hypothetical situations in my head and I was wondering how would I respond if I actually did apply somewhere else. For now, I believe that my answer should be something along the lines of ‘Yes. I have applied to X, Y, and Z. Why? Because they are also hiring for positions that I have interest in and with the current state of unemployment, one can never be too safe with job applications.’ Keep the response as short as possible and reveal as little as possible.

From there, the rep decided to stop the interview and I don’t blame him. Given my responses, I clearly wasn’t a good candidate for the program. I let the idea that this interview was just for practice get stuck in my head and I didn’t take it seriously enough. Although I would have liked the interview to have lasted longer so that I could have been exposed to more questions, I am still happy with what I got. I’ve learned so much just from those three questions alone and I’m very glad that I screwed up an interview for a job I didn’t want rather than for a job that I would’ve loved to have. Seeing as to how this is just the first interview of many, I think it’s a great way to kick start my path to full time employment. I haven’t done an interview in a while so I’m reminded of what it’s like, I know how to better prepare, and I am now armed with three kick-ass responses.

Making Yourself Worth More: 5 Steps to Ace Your Next Interview

2011-10-18T08:00:00.000-07:00

A few weeks ago, I scheduled breakfast with a former professor of mine. I’m currently on the market for a job as my graduation date is coming up soon and I wanted to learn from his experiences. Given today's job market situation, I want to get every edge and advantage I can. He gave me one of the most innovative pieces of advice that I have heard in a long while. I’ve never read about this specific technique online or in any job-hunting book I have ever seen.

Step 1: Think about six companies in your field
List the top three firms that you want to be employed by and the bottom three firms that you would never work for no matter what.

Step 2: Do your research
I don’t just mean looking at the company website. Sit in the lobbies of those companies and observe everything. Look at the way people dress, listen to the way people talk, identify who’s important. Note every subtle detail you can. Every company has its own established culture and you want to be someone who is going to embellish that culture rather than clash against it. If everyone is uptight and stiff, then that’s the image that you’re going to want to project. If everyone is loose and relaxed, then soften up your image a bit to match.

Step 3 Apply to the bottom three companies in your list
Do what you can to get an interview with them. Use those three interviews as part of your learning process. Try to adapt your personality to better fit with that company’s culture. Test drive different responses to interview questions. You’re using these three interviews as practice for the three real ones you’re going to conduct later.

Step 4: Apply to the top three companies in your list
Use what you have learned from your first three interviews to create the best responses possible. Keep in the company’s culture in mind and make sure your answers are congruent with the image that you are trying to portray.

Step 5: Be persistent
There is a lot of interview advice that gets passed around. The perfect interviewee may not be the perfect candidate for the job. Once you leave the room, your interviewer is going to have to ask him or herself “How much of what I just saw was authentic and how much of that was just an act?” Show your interviewer (and the company) that you have done your research and you applied for that job not because you just want to get paid, but because you are genuinely interested in working for them. There’s the standard thank you note that everyone sends, but you can do so much more. Use what you’ve learned about the company culture to generate the right persistence response. Be creative.

Once you’ve done that, the job application is no longer in your hands. If you’ve really taken these steps to heart, then in my mind, there isn’t anything else you could have done to portray your value to your potential employer. If anyone experiences any success with these steps, then I’m very interested in hearing about it. Let me know.

Occupy Wall Street: Which Percent Are You?

2011-10-14T20:35:00.000-07:00

I'm not much of a political person. Whatever few political views and opinions I have, I tend to keep them to myself. I'm not picking a particular side of this ordeal (not publicly anyway). However, I did find these photos floating around on the internet that illustrate two different point of views on the wealth disparity and I thought they were quite intriguing. I thought I'd share them with you.

*NOTE: I am in neither one of these photos nor were they taken by me.*

Fun fact related to the second picture: This morning, I just signed up for my second job, adding on an extra six hours of work a week.

For those not aware of what's going on, since about mid-September, there have been demonstrations going on around the nation, originating in New York City, where people are protesting the income gap that has grown between the wealthiest 1% in the nation and the rest of the 99%. It's a protest against the economic inequality and the lack of governance over the financial corporations that lead to the credit crisis in 2008. As far as I know, the protestors currently do not have a list of demands, but they sure are getting a lot of attention.

Making Yourself Worth More: Careerealism On The 10,000 Hour Rule

2011-10-12T08:00:00.000-07:00

Here's an interesting article that I found stashed away underneath my mountain of bookmarks. It relates back to my post about working on things you're passionate about. My friend showed it to me a few years ago and I thought I'd share it with you all.

This piece is from Careerealism, a blog that is focused on providing career advice.
Read the post here: 10,000 Hour Rule: Why Young Workers Struggle after College (and why some seasoned professionals do too!)

In short, the article essentially states that if you want to be proficient at something, then you're going to have to invest at least 10,000 hours of your time working at whatever you want to be good at. This 10,000 hour rule applies to careers as well. The author gives a little anecdote about how when he was just thirteen years old, his father had him work in an accounting office from that point all the way into the end of his college years. As he entered the workforce, he found that it was easy for him to get along with others and to rise through the ranks. He attributes this not to luck or to talent, but to the experience that he had gained from all the hours that he had logged in working in that accounting office. He then goes on to encourage any professional (not just recent college grads) that want to succeed in their careers to go and start looking for ways they can complete the necessary 10,000 hours.

I am (unfortunately) a math minded person, so I decided to figure out what 10,000 hours really equated to.

10,000 Hours = 416.67 Days = 59.5 Weeks = 1.1 Years

If you devote 8 hours a day, everyday, to your 10,000 hour investment then it would take you 1250 days which translates into roughly three and a half years to complete those hours.

After doing that bit of number crunching, I decided that still I completely agree with what the author says about this "rule." Sure, three and a half years might seem like a long time, but I think that all too often in this fast pace world we are fooled into believing that we only need to spend a minimal amount of time working at something in order to be the best at it. When we take a look at other people's successes, we only see where they ended; we forget to look at where they started from and where all the hard work that was put in. Find a couple people that you believe to be professionals in their area and ask them how long it took them to get where they are. If you know anyone who does martial arts, ask him/her how long it takes to achieve a high rank (e.g. a black belt in Taekwondo or Karate). If you know anyone who you considered to be a skilled musician, ask him/her how long has he/she been playing the instrument and how many hours were put into practicing that instrument. If you know anyone who has a Ph.D., ask him/her how many years he or she spent in college, how many hours were put into late night studying, and how much work was put into the dissertation. I think once you listen to all their grueling stories, you'll find that spending only three and a half years (or 10,000 hours) towards getting better at your career won't seem that bad.

I'm going to try to find as many ways as I possibly can to rack up those 10,000 hours. The sooner I get started, the more experience I'll have. The more experience I have, the better the opportunities that will be presented to me. The better the opportunities, the faster I can make my way from rags to riches.

Making Yourself Worth More: Find Your Passion and Work for It

2011-10-11T08:20:00.000-07:00

It isn’t work if you love what you do.

Bullshit.

I get that it’s a phrase that’s supposed to infer that you don’t consider your passion to be work, but in my opinion, if you truly love something that much, you will work for it/work at it to the point where you are covered in blood, sweat, and tears. I’ll even go as far as to say that if you really are passionate about something, you will do things that you hate in order to get better at the thing you love. Enjoyment or comfort has little to do with whether or not something is considered work.

What do I love? Winning.

And I will work my ass off to get it. Example. In high school, I ran cross country for four years and track for three years. I guess being athletic wasn’t a cool thing because people would always ask me, ‘do you actually like running?’ My answer, surprisingly, was ‘HELL NO.’ Running sucks. It’s painful. And since I was a distance runner, the pain lasted for a long time. The thing is, I was willing to commit to that pain, if it meant that I could win. My commitment lasted four long years. I was by no means a talented or fast runner to begin with. For my first three mile race, I clocked around a 24 minute three mile. That averages out to about eight minutes a mile, which is absolute garbage in the competitive world. But I knew that I could get better, that if I worked hard enough, I could win. So I stuck with it. My second year offered some improvement, but not much. By my third year I was captain of the track team and in my fourth year I was captain of the cross country team as well. I dropped my best three mile time to 17:40, my one mile time to 4:50, and my half mile time to 2:03:89. It took me four long years to achieve that. I hated every step I took, but I loved every second of glory. Now I got a box full of medals and trophies to attest for my victories. Anyone who even dares to say that I didn’t work for my achievements will receive quite an ear full from me.

Another example. I love economics. I love it so much that I essentially teach it. I say essentially because I technically haven’t earned my credentials to be a teacher/professor. (Damn politics.) Here’s the kicker: I hate school. In fact, the only reason why I didn’t drop out of high school was because I wanted to experience success from running. I hate school almost as much as I love economics, but I know that if I want to get anywhere with econ, I’ll have to endure through school and earn my degree. I have a near 4.0 GPA (3.978) and I’ve hated every course I’ve taken except for the econ related ones. The thing is, I love economics so much that I am willing to go through all the work and trouble associated with earning that degree. Six more months and I’ll be graduating with top honors and getting a piece of paper with my name and the word ‘economics’ on it.

What’s my point in me saying all this?

Success comes at the price of hard work and commitment. If you want to become a more valuable asset, if you want to be paid more for what you do, then you have to be prepared to go out and do things you hate, probably for years at a time. It’s hard to do things you hate for something you’re not passionate about. Earlier I wrote about enhancing your perceived and actual value. Don’t waste those enhancements on something that you’re not avid about. Find something where you will be able to endure the nitty gritty and still be able to come out smiling at the end and you will have found something you will be successful at. And if you are successful at what you do, you will not only be worth more; you will be invaluable.

Failure Story: Failed E-Store

2011-10-10T19:21:00.000-07:00

A lot of times I see unknown people rocket to success, I hear a lot of my friends say “Gosh, if only I were that lucky.” People don’t seem to realize that success doesn’t always come around the first time. Things don’t always work out the way that we would like them to. A very cliché example of this would be Thomas Edison, who claimed to have found “10,000 ways to not make a light bulb.” I don’t want this blog to be just a record of my success only; I want to record my failures too, so that I can look back and get a clear picture of what my life was really like, instead of some over glorified spartan image, because none of my errors were recorded.

So without further ado, here is my first failure story.

A few months after I turned 18, I was jobless and tired of being broke. Although I wasn’t on the poverty line, I wasn’t exactly striking it rich either. This was back when my mind was set on get rich quick schemes. I submitted many job applications, but because my fields of experiences were so bare, I didn’t get any calls for interviews and the like. A good friend of mine was also in a similar situation; without a job, but eager to start making money, even if it was hardly anything. We just needed a place to start, to get our foot out into the real world. We got together a few times to collaborate our minds to see if we could come up with a million dollar idea. Trying to provoke an idea, I asked my friend what he was really good at; what did he really have a passion for and what did he have a lot of experience in. He said “Magic: The Gathering.” I can’t remember the complete details of what went on that night, but we walked away with the idea of purchasing MTG cards in bulk and selling all the high priced ones online. My friend had access to an eBay coupon which gave him a slight discount off a purchase (with a $5 discount, how could we possibly go wrong?) We purchased a booster box of one of the most recent releases and a booster box of one of the more consistently high priced releases. We had 72 booster packs laid out in front of us. We agreed to open up half (36) and sell the contents on eBay. The other half (18 each) we would do with it as we wished.

What a fun night that was. There was silver packaging everywhere, with playing cards spread all around. We organized the cards and began looking up their prices online. We had a good number of cards that were worth one to two dollars and a few others worth a bit more. I was sure we struck gold.

As we were about to put the cards up on eBay, I found out the bad news. If we sold a card for 99 cents, then after a 42 cent stamp, an envelope, eBay fees, and Paypal fees, we would be left with… nothing. The revenue from selling a card would be equal to the transaction cost. We couldn’t sell any of the cards that were worth a dollar because we would get absolutely nothing in return. Oops. We ended up selling what we could online in order to recover back some of our costs and split up the rest of the open cards. My friend opened up the boosters and held on to his half of the cards (because he plays with them) whereas I took my boosters and sold them to anyone I could for 25 cents off the market price. For the opened cards, I again sold what I could at a discount and just kept the rest to remind myself of this experience. I think I ended up getting very close to breaking even at end.

Moral of the story: Do more research before jumping into a project.

But Lately I Have Become Complacent

2011-10-05T20:01:00.000-07:00

I took myself from absolutely nothing to becoming fully independent. I paid my way through school on my own; I have zero debt and about a $10k net worth. Not bad for three years of work.

But I have grown used to the success. In some ways, I have burned myself out from working so hard at becoming financially independent. I grew tired of always saving my money, never being able to spend any of it. And so, I slowly began to let myself slip, spending more money than I could actually afford. Over the past two months, I made absolutely nothing but I spent around $4,000. A good amount of it went into buying necessities for the apartment I was moving into, but a lot of it went into splurging. Got a $500 tattoo and spent a ton of money taking people out for lunch and dinner.

My rational was that ‘I worked hard for my money. I should be able to spend it the way I want to. If I’m going to get rich in the future anyway, then it shouldn’t really matter how much I spent now.’ That’s exactly the kind of mindset that indefinitely postpones peoples’ journey from rags to riches. Getting rich is a slow process and I have forgotten that. Good thing I caught myself before I let myself go too much.

There was at least some good that came out of this though. I realized that I have become too comfortable with where I am. I have also set myself back pretty far, but being set back has re-motivated and re-energized me to work hard towards becoming financially independent. I’m ready to make this my life’s passion again.

I wish I could be smooth and continuous about this, instead of having so many ups and downs, but that just isn’t me apparently.

I am a Product of My Struggles

2011-10-03T19:50:00.000-07:00

I was sitting in work training a few weeks ago and we were asked to select words that define our character. I hadn’t really given it too much thought prior to now, but I have come to realize that without my prior struggles, I would not be the person I am today. In fact, fighting for survival (so to speak) is such an integral part of my life that I become bored when I am not challenged to my limits.

I didn’t come from a particularly wealthy background. My parents are divorced and they have been since I was three, so I mainly lived off the support of my mother. I wasn’t in shambles, but we were poor enough to qualify for some government assistance programs. When I was younger, I couldn’t understand why I couldn’t have the abundance of toys that my schoolmates had. It actually wasn’t until I was about sixteen years old that I figured out, “Holy shit. Money is limited and if something were to happen to my mom, I’m completely screwed.”

It was at that point that I began fending for myself. I applied for work everywhere I could around my area; I intended to go to school during the day and work at nights so that I could start earning money. I didn’t get a single phone call from anyone. That’s when I began to recycle. I needed money and I knew recycling was a way to get it. But that wasn’t enough. Around the same time, I was introduced to a card game, no limit Texas hold ‘em to be exact. I saw that as a potential opportunity to dig myself out of the poverty hole and so for about two years, I devoted my life to playing poker with the intent of going professional once I turned eighteen. (That’s the age requirement for Indian casinos). I hustled my school mates to the best of my ability. I also gave online poker a try as well, since there wasn’t any real way to verify my age and identity, at least until I decided to cash out. I made a couple thousand over the course of my poker career, but it was a parsley amount compared to what I actually needed to live. Of course, my mom was still supporting me, but in the back of my mind I kept thinking of how helpless I would be without her.

At this point I still only had a handful of dollars to my name (I spent away my poker winnings, mostly on gas and other necessities) and still no constant, dependable cash flow. It wasn’t until I graduated high school and started going to college that I managed to land my first job. My starting wage was $8.00 an hour (California’s minimum wage). I was ecstatic. At $8.00 an hour, for 12 hours a week, that meant that in a month I could get... enough money to pay for school, gas, and some food. Damn it. I continued to scrounge around for other ways to make money: I continued to play poker and recycle and I even started doing online surveys. I drastically cut down my spending to its bare bones so that I could start saving money. It was at this point that I really began to build up the amount of capital that I had today. I kept working hard at my job and as a result I got a raise along with more hours. I worked hard at school because I knew that if I just screwed around I’d be wasting time that I could potentially spend working.

In order to further motivate myself, I tried to become as independent as possible so that in the event that I was left completely without support, I would be fine. My mother is fairly old so with each passing moment, that day draws nearer and nearer. So I spent the next three years saving up my money, building up my skills, and getting experience, leading me to where I am today.

But lately I have become complacent...

Making Yourself Worth More: Show What You Know

2011-08-15T11:38:00.000-07:00

I apologize for my delayed post. I had some not so nice things happen to me in my personal life. Anyway.

In my last post, I wrote about dressing for success and how to improve your perceived value. Your perceived value is your bait, the worm on your fish hook. Your actual value is what reels them in. What is actual value? Well, it’s value that you actually have. It’s the knowledge and skills that you bring to the table for whatever situation that you are in. It’s what you are able to do, that others are not.

We’re in the process of gaining actual value all the time. Some methods of acquiring value are quicker than others, but you’re acquiring value nonetheless. Anything that you learn about, any experience that you have; those all contribute to your actual value, one bit at a time. Until they find a way to directly download information into our brains, we’ll have to deal with the slow learning process. So what are the implications of that? It means that if you want to have actual value in area, you have to go and work for it. Starting now. Do not wait until you actually need value to start obtaining it; get it now and keep it on reserve, otherwise you’re going to find yourself saying “Golly, I really wish I did _______ when I was younger.”

In essence, there are only really two ways to go about obtaining actual value. You can either get yourself educated in the theoretical aspect of something or you can go out and obtain hands on experience. One is not necessarily better than the other, but sometimes you need one before you can go after the other. Both are important and in order to become more rounded out so you WILL need to obtain both.

How can you make yourself more valuable via education? Go to school. Read a book. Talk to someone. Peruse through the internet (many of my days have been spent on Wikipedia). Watch videos of others doing what you want to do. READ MY BLOG. All of these contribute to learning. You don’t have to go sit in a classroom in order to learn something; there are opportunities all around you.

The same applies to experience. Opportunities are everywhere. Interested in becoming an accountant, but nobody will hire you because you have no experience? Then work for free. Everybody needs an accountant. I’m sure there’s some nonprofit organization somewhere that would love to have you on their team. Want to learn more about computers? Take an old one (one you’re not using anymore) and break it open to see what’s inside, then see if you can’t put it back together. Already really good at something? Then continue to improve on it. If there’s someone that’s better than you at what you do, then there’s room for improvement.

Sometimes, you might feel that the actual value that you have is pretty useless and is only applicable in certain situations. Not true. Sometimes there are hidden values that came along with what you learned that you might not have realized you picked up. My favorite example of this is college. God I hate college. I hate the public school environment in general. For the longest time, I couldn’t see why I had to learn all of these stupid things, especially since I wasn’t going to be applying them anyway. Who the hell needs to know what a cumulus cloud is? Why do I care how hot the surface of the sun is? It’s not like I’m gonna go touch it. It took me a while to realize that going to school isn’t about learning useless facts, it’s about getting you to think critically. It’s about learning how to manage your time properly and to interact with others in a social environment and the like. Four years from now, it’s likely that I won’t remember a single thing that I learned from school, but I will still have the valuable skills that I obtained from it.

That leads me to my last point. Find ways to display what you know. Get proof of what you have learned and what you have done. One of the reasons why going to college is so important is because at the end of the four or five year toll, you walk out with a piece of paper that has your name on it that basically says “I can somewhat think for myself.” If you’re really good at something, go and get yourself certified or get yourself licensed. To you, those certifications might mean nothing, but to others it tells them that you meet at least some standard in this world.

Unfortunately, investing into yourself and obtaining actual value isn’t a low cost thing. In most cases, it will require money and in some cases, it will require a lot. However, if you invest in yourself, your knowledge, and your experience properly, it will pay for itself many times over.

Making Yourself Worth More: 4 Steps to Dress for Success

2011-08-05T08:00:00.000-07:00

Take a second to think of all the people that you’ve passed judgment on, solely based on what they are wearing and how they presented themselves. Now, just because you dress a certain way doesn't necessarily make you a certain way, but understand that it can be very confusing. Dave Chappelle provides a pretty nice example of this.

Warning: The following clip includes some mature content and may not be safe for work.

For those of you who didn’t watch the clip: If you saw a man with a long, unkempt beard and raggedy clothes walking down the street, you’re probably going to think that he’s homeless. On the other hand, if you saw some clean cut person walking down the street in a nice suit talking on a cell phone, you're probably going to think that he's a pretty well-off businessman. Someone's first impression of you isn't going to come from what you say or you what you do, it's going to come from how you look.

This article is all about perceived value; if you dress like you’re worth a lot, then people are going to treat you like you’re worth a lot. Likewise, if you dress like crap, then you're likely going to be treated like crap. Why is perceived value so important? Your perceived value is what determines your first impression, which is your most important impression. If you screw up your first impression really bad, then you may never get to talk to someone again. Guys, think of all the times you've tried to hit on a girl. Ladies, think of all the times a guy has tried to hit on you. Think about the first minute of that interaction. If the guy screws up that first minute, you can be almost 100% sure that he isn’t going to be going anywhere with that girl anytime soon. The same idea applies when you meet your potential employer; if you look like garbage, he isn’t going to want to hire you.

Luckily, it doesn’t take very many steps to fix this.

Step One: Figure out how you want to be perceived
Look at and talk to some of the professionals in the area that you want to work in / be a part of. Find out what they wear then look up where you can buy it. Really do your research before you go out and spend a ton of money on clothing. There are a lot of great websites out there that’ll provide you with all the nuances that you need to know for dressing up, such as what kind of clothing goes with what event, which color combinations go well with your skin tone, etc. If you’re young and you don’t really know what area you want to be recognized in yet, then get yourself some business attire. You’ll definitely need that regardless of what you’re doing for interviews and the like.

Step Two: Get the proper clothing and learn how to wear it
Buy clothes that match the perception that you want to have. If you’re just starting your professional wardrobe, the key isn’t spending lots of money on designer clothing; it’s getting clothes that fit properly. Research the type of clothes that you’re supposed to be wearing and how you should be wearing it. I see a lot of young guys running around in new dress shirts and blazers and what not, thinking that they’re super cool. The thing is they’re not because their clothes don’t fit them properly. To the untrained eye they might look fine, but to someone who knows about business dress (which any professional would), they look like trash. Their sleeves are too long, their shoulder pads are too big, they buttoned the bottom button their blazer, etc. You don’t have to go and get all of your clothing tailored, but you should at the very least get yourself measured so you can buy clothes that fit. If you don’t have measuring tape, go to the tailoring section of any department store and they’ll give you your measurement sizes. Take those measurements and go to a discount department store like Ross or Mervyns to get some starting clothes. You can move on to more expensive clothing once you get more money from the extra value that you just created for yourself.

Oh, and if you’re a guy, LEARN HOW TO TIE A TIE. There’s no excuse for being a twenty-something year old and not knowing how to tie a tie. There are plenty of places on the internet that’ll teach you. Search for it.

Step Three: Wear your proper clothing, all the time
There’s no point in buying clothes if you’re not going to wear them. Wear them all the time if the setting permits. You never know when you might meet a potential employer or someone who could refer you to a potential employer. You might be the greatest person in the world and everyone would love you if they got to know you, but the thing is, not everyone will get to know you. Remember, this is about perceived value, your first impression. Not everyone you meet will have the energy, time, or willpower to sit down with you multiple times to really get to know you; they’re going to go off their first impression. It’s a lot harder to set the proper first impression if you’re not wearing the proper clothing.

Step Four: Change the rest of your presentation to match the perceived value you want
This article focused mainly on the way you dress, but that’s not going to be the only thing that people notice about you when they first see you. Get a haircut if you need one. Lose the piercings and cover up the tattoos, unless you’re specifically going for the “don’t hire me” look. This isn’t about self expression, it’s about transmitting your value via the way you look.

Of course, dressing for success is only part of the equation, but it’s a big step in the right direction and a fairly easy way to make yourself worth more to your employers.

Making Yourself Worth More: Build Your Network

2011-08-03T15:16:00.000-07:00

Growing up, I was a very introverted and independent child. I had a couple close friends, but I kept mostly to myself. I had the mindset that once I left a place, I would never have to see or speak to any of the people I met prior, so I didn’t spend much time investing into relationships with people. This applied to people of all ages, friends and family alike. This even carried on to when I became an adult. Facebook came out in 2004, but I didn’t finally make one until six years later, long after the hype had caught on. For the longest time, one of my close friends constantly tried to get me to be social, to “network” with people and for the longest time, I didn’t listen. To me, networking was a dirty word and it drew up images in my head of me asking for handouts from people I hardly knew. I always thought that it meant going to a bunch of social functions, starting up as much small talk with as many people as you can and exchanging contact information only to never speak to them again until you decide that you need their help in landing yourself a job. They might end up on your list of people to mass send Christmas cards to, but contact never really extends beyond that. I also feel morally obligated to return any favors in full. Because I didn’t like the idea of squaring up with people all day, every day, I felt even more driven to work on my own. As a result, I never socialized much with people that I thought I would never see again.

I could not have been more wrong.

Networking isn’t about getting people’s names into your rolodex (or cell phone contact list, if you’re too young to know what a rolodex is), it’s about building connections with people. Not just fake small talk connections either, real connections where people actually get to know you. Think about it: even if you are trying to leech off of someone and get a free job recommendation/reference, no one is going to put their name and reputation on the line for someone they don’t know. I sure as hell wouldn’t. It’s about the give and take; using your strengths to cover other people’s weaknesses and vice versa.

There is no such thing as a "self-made" man. We are made up of thousands of others. Everyone who has ever done a kind deed for us, or spoken one word of encouragement to us, has entered into the make-up of our character and of our thoughts, as well as our success.

-George Burton Adams

If you think that you can get by in this world lone wolf style, then you’re probably not going to believe me when I say this, but you’re wrong. I used to be the same way too, but as much as I hate to admit it, it’s hard to get anywhere without knowing people. That applies not only to the work environment, but everywhere else as well.

Relationships are all there is. Everything in the universe only exists because it is in relationship to everything else. Nothing exists in isolation. We have to stop pretending we are individuals that can go it alone.

-Margaret Wheatley

If you’re interested in finding out more about what real networking is and how to use it effectively, I highly suggest you read the book Never Eat Alone by Keith Ferrazzi. Just the second chapter alone, titled “Don’t Keep Score” provides a really good mindset that networking should be approached with. This book was one of the main factors that helped change my view on networking. If you’re looking to meet people just so they can owe you favors and so that you can build equity, then you’re doing it wrong.

Anyway, I’ll leave the philosophy and persuasion to the book, as it does a much better job of explaining networking than I ever will. What I’ll talk about instead is examples of how networking has helped me personally and where and how you can start building your own network. Let’s get started.

Every single job that I have landed so far was a result of networking. When I first got out of high school and I started looking for work, I had zero luck in finding anything. I didn’t even get any calls back from the places I applied to. I ran into one of my old friends (one that I haven’t talked to in a while) at my church one day and told him about my problem. He told me that his former employer might be looking for an office assistant and that he (my friend) would gladly pass on my contact info. Sure enough, a few weeks later the position opened up and I received an email asking me to come in for an interview. My potential employer was impressed with my resume and in conjunction with the high recommendation that my friend gave me (of which I did not ask for), I got hired on the spot. There were two other candidates applying for the position. I’m pretty sure the reason that I beat them out was due to the recommendation.

I landed my second job in a similar fashion. I went to my Economics professor one day to ask him what could I do to further my studies in Econ. He immediately suggested that I should work as one of the college’s tutors. Well, I already had my office assistant job (see above), but I decided to go with it anyway. He took me to meet my potential supervisor, gave me a recommendation, had me fill out some paperwork and the rest is history. My only intention was to go into his office and get more books or articles to read, but I walked out of there with another job. Amazing.

I have a few other examples of how networking has helped me, including yet another job, discounts or free repairs, advice, etc. If I really sit down and think about it, the list is endless and I’m sure it’s the same way for you too. Like the George Burton Adam quote says, “Everyone who has ever done a kind deed for us, or spoken one word of encouragement to us, has entered into the make-up of our character and of our thoughts, as well as our success.”

When I ask some people about their networks, they claim that they don’t have one. YES YOU DO! The reason you think you don’t have a network is because you’re approaching networking with the wrong mindset. Again, networking isn’t about people that you can squeeze favors out of, it’s about building connections. Your parents are part of your network. Your friends are part of your network. Your boss, co-workers, teachers, everybody that you know is part of your network. If you feel guilty or ashamed of asking for help from those people, then that likely means that you’ve only focused on the ‘take’ part of the “give and take” in a relationship. If networking is approached correctly, then you shouldn’t have a problem asking for help.

Who can you network with? Any and everybody that you meet. If you are still in school, then this is a great time to network as you have access to so many people who are just jammed pack with knowledge and experience and are more than happy to help you. That’s right, the teachers and professors that you think are your worst nightmare can actually be your best friends. Go and talk to them. Find out where they’re from, what they’re interested in, who they know, etc. If you go and converse with them enough, then maybe they’ll take an interest in you and the next time a great opportunity comes up, you will be the first one they contact to tell. What if you’re out of school and already in the workforce? Then speak to your co-workers or your boss. Or you can take it one step further and try speaking to the people who run the company. Once again, these people are packed with knowledge and experience. Some of them like to help others, some don’t. It’s a bit of a hit and miss, but you’ll never know until you try.

Do yourself a favor: don’t filter out people that you don’t think will be useful to you. Not only is that the wrong mindset, but you’re actually hurting yourself more when you do that. So what if the person you’re connecting with doesn’t provide you access to valuable resources? Maybe he or she has a cousin that works in the industry that you’re interested in. Maybe one of his or her close friends is the HR rep of the company you want to work for. Who knows. You certainly won’t if you don’t get to know them.

In essence, the people that you network with are going to be the people in your support group. Other people’s networks in your support group are going to be an extension of your own support group. The bigger your support group, the more things you are going to be able to accomplish. Your value will grow as your network grows. I firmly believe that the size of your network will be the biggest contributing factor to your success. It doesn’t matter what kind of knowledge you have or what kind of degree you hold, if you know the right people you will be able to get what you need. So what are you waiting for? Go out and start connecting with people.

tl;dr: Go make friends. They’re useful.

Limitless

2011-08-01T13:58:00.000-07:00

So I watched the movie Limitless (2011) this weekend and I proceeded to spend the next eight hours or so thinking about it and placing myself in different scenarios in the movie. There wasn’t anything spectacularly mind blowing about it. The movie was alright; the acting and the storytelling was pretty good. What got me to waste one third of my day in fantasy land wasn’t the movie itself, but the idea behind it. For those of you who don’t know, Limitless revolves around Eddie Morra, an everyday nobody, getting his hands on this miracle drug that lets him take full advantage of his brain. The movie follows the myth that people only use about 20% of their brain and the miracle pill lets you access of 100% of your brain, all the time. The magic drug essentially turns you into a super genius, allowing you to access every memory of everything that you’ve ever heard and seen, allows you to recognize all sorts of patterns, and give you access to insanely creative powers.

I spent the next eight hours just speculating and wishing and dreaming of what I would do if I had access to that drug and limitless brain power. After a while, I snapped back to reality and I realized that I was wasting my time by wishing for instant success. What I should have spent those eight hours doing was work on something that would have added value to my life, moving me one step closer to riches. I had momentarily fallen into the same trap that I’ve witness many others fall into: spending my time wanting something instead of actually going out and getting it.

That’s why for the next month, I am going to devote myself to writing about ways that you can go out and make yourself worth more. The effects may not be immediate, but they will be there. Sadly, instant success is something that only exists in movies. As for the things that I will post, I am going to be as concrete and detailed as possible. None of that vague “get yourself in the right mentality and go help yourself” bullshit will be posted here. I will write about things that have personally worked for myself, have seen work for others, or is on my list of things to attempt to make myself more valuable as a person. I’m not just talking about social value either (although that is important), I’m talking about things that will increase your earning ability, either now or in the near future. Granted, I'm only twenty one years old and I don't have a lot of experience with the world, but I sure as hell have talked to a lot of people who do.

I’m excited. No more day dreaming for me. Or for you either, if you happen to be a lucky reader of my blog.

How Rich is Rich?

2011-07-27T19:32:00.000-07:00

Suppose you are absolutely broke, with no money in your pocket and nothing to your name. I hand you a dollar. Are you rich? Of course not, it's just a dollar, most of you would say. I then hand you another dollar. Are you rich now? What if I hand you another one, and another one, and another one? How many dollars would I have to hand you before you finally consider yourself to be rich?

It's really easy to see the differences at the far ends of the spectrum; someone is poor if they only have one dollar, but someone is rich if they have one billion dollars. The trouble is finding the middle ground. This is a question that I struggle with all time time: How much of something do you need to have before you have a lot of it?

Let's start with a base definition, something to work with. This will be a broad definition, but we'll whittle it down as we go. Let's say that:

If you are rich, then you have a lot of money.

That's pretty simple and almost everyone would agree that the above statement is true. Of course, there are other forms of richness, dealing with non-material things and the like, but that's not what we're talking about. (If you came here to argue that point, then go troll somewhere else.) The problem with this definition is that it is still very vague. "A lot" means different things to different people in different situations. Being ten minutes early to the airport is very different from being ten minutes late to the airport.

What if I take "a lot" and change it into something more tangible, something more materialistic. At first, I was going to change it to "If you are rich, then you can buy whatever you want," but then I realized people with credit cards can buy whatever they want. Instead, I'm going to make it:

If you are rich, you can afford to buy whatever you want.

I'm going to call this level one rich. Notice the emphasis on afford and on you. My old definition of being rich used to very simply be "have a billion dollars," but I realized that my definition did not match up with a lot of people's. To create a more encompassing definition, I am conditioning it on you (the reader) and what you would want to buy. So if you can afford to buy whatever you fancy, then you are rich. If someone else can also afford to buy whatever you fancy, then he or she is also rich. Also notice that I said afford, not have. I want a thousand girls running around in bikinis in my 100 yard swimming pool, but even if I were able to afford that, my girlfriend wouldn't allow it and thus I would not have it (sad face).

Before you go on to say that you're one of those people who doesn't want very much, keep in mind that things cost money and those costs add up. You want to eat and if you average out $200 a month on food ($6.67 per day, $2.22 per meal), then over the next forty years, you're spending almost $100,000 on food alone. Over the course of our lives, I estimate that we'll spend around a million dollars. So those of you who say "Bah, I don't want to become a millionaire," well guess what, if you live long enough then you'll have to. You just won't have all that money in one pile in front of you at one time.

So that's level one rich. You (or someone else) has enough money to buy whatever satisfies you. But there are a lot of people who are clearly richer than others, so how do we differentiate them from the rest of the population? That's where level two rich kicks in:

If you are rich, you can afford to buy whatever you want twice.

I'm pretty sure that you can figure out how the next levels of riches are defined. It's a bit of a cheap and not-so-creative way to define levels of richness, but it works. It provides some sort of standardization and measurement for you to compare yourself to others. It beats the heck out of trying to narrow down to the exact dollar when someone goes from being poor to being rich. This is just how I see it. Feel free to come up with your own forms of measurement.

Advantages To Owning Your Own Home

2011-07-25T08:00:00.000-07:00

I'm a pretty independent person.

Once I graduate, I refuse to move back to live with my parents. I didn't make it through college on my own just so I could go back to mooching off my mom.

Ideally, I'd like to start owning my own home as soon as possible. I've already begun saving for it. Why buy a house?, you might ask. Why not just rent a place? It's much cheaper, isn't it? Maybe, maybe not. There are certain advantages to renting, but there are also advantages to paying a mortgage rather than paying a landlord. For example:

“Saving” in Your Home
Whether this really can be considered an advantage is actually debatable. When you start making monthly payments on a house, you begin to build what is known as equity, which is the value of an asset minus what you owe on it. Basically, you’re building value in your home so that if the need ever arises, you can borrow against it or sell it. The problem with this is that if you borrow against your house and fail to make the repayments, your home will be repossessed and you’ll be left without a place to live. If you sell your house, then you’ll have plenty of cash on hand, but once again, you’re without a roof over your head.

However, this does have its advantages over renting. When you make your mortgage payments, you build up your equity along with your net worth. When you make your monthly rent payments, you build your landlord’s wealth. You can decide for yourself who you want to make richer.

Stable (or at Least Predictable) Costs
When you rent, the landlord can decide to change the cost of rent to match inflation or rising housing costs. When the cost of rent goes up, there’s very little you can do against it aside from complain or move out.

One good thing about purchasing a home is that it provides you with a stable or predictable payment schedule. If you get a thirty year fixed mortgage, your monthly payments will stay the same month after month, for the full thirty years. If you get an adjustable rate mortgage, you’ll at the very least know the maximum amount you will ever end up paying on your home per month and possibly when the interest rate will go up. This way, when you create or revise your budget, you know how much to set aside for paying for a place to live. Also, should inflation ever go up, the dollar amount you pay will never change but the purchasing power will. So if inflation rises year after year (which has been happening for a long time) you’ll be paying off your house with devalued dollars, which is the same as paying a smaller amount.

Possible Appreciation in Value
As we’ve all seen from the bursting of the housing bubble that we’ve had not too long ago, the value of homes can go up. If the value of your home goes up faster than the rate of inflation, then your home has appreciated (gone up in value). This increase in value gives you more equity should you ever want to borrow against your home. The downside of this is, like we’ve seen from the housing bubble, the value of homes can also go down. However, if you’re not just buying a house to speculate or if you’re not borrowing against your home, this wouldn’t be something to worry too much about.

Tax Benefits
When you make monthly mortgage payments, you can take the amount you pay in interest and deduct that from your income tax. I don’t really consider this to be saving money since the amount that you would have paid in taxes just went to pay the interest in mortgage. But that aside, may help give some people peace of mind knowing that you won’t have to you’re not incurring the full cost of everything.

One might argue that when you buy a house, you have to pay property taxes whereas if you rent, you don’t. Technically, they’re right. When you rent, your landlord pays the property tax on the house. However, they get the money for the property tax from you by incorporating it into your rent. So although you may have a new expense/tax when owning a home, it’s one that you would have paid anyway when renting.

All this is not to say that owning a home always is better than renting. Renting does certainly have its advantages. If you want help in deciding whether to rent or to buy, one of the things you should definitely check out is this calculator here from Dinky Town. It'll take out some of the tedious mathematics out of the way by calculating what your monthly housing payment would be, given the home price as well as a few other things.

Taking a Break Already

2011-07-19T19:57:00.001-07:00

I will not be posting this week as I need to finish up a forecasting project and report. Will resume regular schedule next week.

Recycling: My First Successful Money Making Idea

2011-07-15T08:00:00.000-07:00

If you saw a penny on the ground, would you pick it up? What about two pennies? Three? Four? What about one thousand?

What if you saw something that was worth one penny and all you had to do was take one step to convert it into an actual penny, would you still pick it up? What if you saw two things? Three? Four? One thousand?

Opportunities to make money are all around us, you just have to look carefully. What some people may view as trash, others may see as gold.

Back when I was in high school, I wanted to make money but I had no job. I applied for work at six or seven different fast food places and several retail stores, but I didn't get a response from any of the places I applied to. (This was during the economic boom too =/)

Seeing as to how I couldn't land myself an hourly wage, I started to look to other ways of making money. (Don't worry, I didn't do anything illegal.) One of the most successful ideas that I came up with was to recycle. My school had a lot of vending machines that sold soda and Gatorade and a lot of people bought drinks everyday. This was just before the "green your planet" mentality, so my school didn't have very many recycling bins at that time. You could see a sea of plastic bottles everywhere: on the ground, in the trash cans, and in the classrooms. I did sports too and during the events I would find bottles everywhere as well. Seeing as to how no one picked any of them up, I decided to take the initiative and kill two birds with one stone: By picking up the recyclables, I would be saving the planet while making a pretty penny. That became my motto and my response to anyone who asked why I was digging through the trash. Save the planet, make a dollar.

It was something that worked out pretty well for me. Selling the plastic bottles by pound, I made about $15 per week. This was when plastic was worth about $0.50 per pound (in California, we get the cash redemption value). When the health fad took over and schools began banning junk food, I started losing out on a lot of my revenues, but those lost revenues were made up by bottles of water that the school started serving during lunch time. I estimate that over the course of four years, I made a little over $1,000 just from recycling alone. Now, $1,000 over four years isn't a lot of money and considering the amount of work I had to put into collecting, it most definitely was not worth my time. However, I didn't have any other means of earning income, so getting $1,000 was definitely better than getting nothing.

After I graduated, I managed to land myself a much better paying job so I stopped hunting for recyclables. However, when I went to my community college I saw the same pattern of people just leaving perfectly good recyclables everywhere. Most of the lazy bastards couldn't even manage to stick the recyclables into the recycling bin RIGHT NEXT to the trash can. I decided that since I still had time to spare, I might as well use it to make money so I decided to continue my recycling efforts. I made significantly less this time around though, as I focused more on school and work. I think I made just under $200 over my two years at community college.

After I transferred from community college to a university, I thought my recycling days were over. Again, I was wrong. There were still plenty of recyclables strewn all across campus, just waiting for me to pick them up and turn it into cash. And so I collected.

Beginning this year, I decided to take photographic evidence of what I recycled so that I can show you just exactly how much I am getting. This year, I have collected and recycled 16.55 lbs of aluminum, 85.24 lbs of glass, and 62.75 lbs of plastic for a grand total of $89.90.

Was the money that I earned from recycling worth it? Consider the two questions that I asked at the very beginning of this post. Picking up one thousand pennies off the ground will take a lot of time and in the end, all you would have gained is $10. On the other hand, it is $10 that you didn't have to begin with. Recycling takes a little more work as you have to do a few more steps before what you collected will be turned into cash. Some people think that it is a waste of time, because if you do the math, I'm generally earning about $2 per hour from recycling. Others wouldn't dare harm their social reputation by ever being caught looking through a trash can. I, on the other hand, see a golden opportunity. I don't have to go full on dumpster diving to pick up a lot of recycling. (I only go for the bottles and cans that can easily be obtained without me getting dirty). I do have time to spare to make extra money. The effort and energy exerted doesn't have an effect in my workplace or in my studies. So no matter how I look at it, to me, there is no loss to recycling. I could either spend an hour in front of my TV and rot away, or I can spend an hour to make an extra two bucks. It's all about how much that extra dollar is worth to you.

If you're looking to make more money but don't know how, then recycling would be a good and easy place to start. You don't have to go and dig through trash cans like I do; it could be as simple as asking family members to stop throwing away recyclables in the trash. From there, you could ask your neighbors to donate their recycling to you, if you notice that all they do is put it in the dumpster anyway. If you are really clever, you would be able to find a way to fully automate the process so that you can generate a steady stream of income without you having to do anything. You just have to look for those golden opportunities. Happy hunting.

Spend a Lot of Time on the Internet? Get Rewarded for It with Bing Rewards

2011-07-13T08:00:00.002-07:00

If you find yourself spending a lot of time on the internet, especially doing searches, you can turn some of that time into money. Well, not cash exactly, but into gift cards and the like. Until December 31, 2011, you can earn credits for using Microsoft's search engine, Bing. You can then take those search credits and redeem them for something of value, like an Amazon.com gift card, Microsoft points, or gas cards from a popular gas station.

Sign up here

If you buy a lot of things from Amazon, like textbooks, then you can easily earn a $5 or $10 gift card in the span of a few months. Some of you may think "$5 or $10 for a few months of work? Screw that." If you don't spend a lot of time in front of a computer then yes, it wouldn't be worth it. But if you do use the internet a lot, then you might as well get some rewards out of it. Even if you don't use Amazon to buy things, there's a whole slew of other things that you can redeem with the points. You get 250 points just for signing up, so you're already a big step towards redeeming something.

If you have time, then you should check it out. Remember, you only have until December 31, 2011 to earn points, so if you want to grab something big, then you should act soon.

Note: I DO NOT receive any referral or affiliate rewards if you sign up. I just thought I'd pass on the good news.

How I Am about to Graduate from College with ZERO Debt

2011-07-11T08:00:00.000-07:00

I only need nine more classes until I earn my Bachelor’s degree.

Unlike many of my friends, include those who have already graduated, I will be receiving my degree with absolutely no debt of any kind. So while others are hunting for a job to pay off the money they owe from school, I’ll be hunting for a job to pay for my first house.

Here’s how I did it:

Note: For those who are wondering, I didn’t take money from the Bank of Mom and Dad to fund my education. I did this all on my own.

I applied for Federal Financial Aid
If you are planning to attend college (both community college and a four year university) and you meet the requirements, it would be in your best interest to apply for Federal Financial Aid. Fifteen minutes spent filling out an application could easily put thousands of dollars at your feet that you DO NOT have to pay back. That’s right, you read it correctly. If you are eligible for Federal Financial Aid, our government is literally PAYING YOU to go to school. The amount that you receive varies depending on your family’s income and financial need, but it most definitely does not hurt to try. Some people are denied free aid due to their household income being too high, but even if you are denied federal student aid, you could still be made eligible for low interest student loans, which would easily best any loan a bank would give you. A decent amount of my education was federally funded.

I applied for California Financial Aid
If you live in California, you could also apply for financial aid from the state of California, more commonly known as Cal Grants. This is more free money that is being thrown at you from the government (i.e. more money that you don’t have to pay back). Unlike the aid at the federal level, you can still receive plenty of money even if you do not meet the income requirements. There are several different types of Cal Grants, each with their own requirements. There’s one based on income eligibility (Cal Grant B), but if you don’t meet that, you still may be eligible for Cal Grant A, which is based on an academic eligibility (your GPA). If you are attending a technical or vocational school, you may be eligible for Cal Grant C. I didn’t meet the income requirements for Cal Grant B, but definitely met the academic requirements for Cal Grant A. Despite only being eligible for one Cal Grant, more of my education was paid for at the state level than at the federal level.

I started my college career at a community college
When I got out of high school, I opted to attend community college for two years before transferring to a four year university to complete my degree. That was quite possibly the smarted choice that I have made my life thus far. My community college only charges $26 per unit (a ‘unit’ is how classes are measured), so in order to be a full time student (12 units), I only had to pay $312 dollars in tuition per semester. Of course, there were a few other administrative fees attached, but in total, I paid less than $2000 in tuition for two full years at a community college. Compare that to the $3,500 that I have to pay per quarter(four times a year) at the university that I am currently attending. And that only covers tuition. There’s still housing costs, general living expenses, transportation costs, books, and a whole slew of other things you have to worry about. If you’re attending a community college, then you’re likely to be living at home with your parents (or whoever you lived with when you were in high school) and half of those costs will already be taken care of.

Now, there’s a stigma attached to going to community college. In some people’s eyes, it’s viewed as a place for those who weren’t smart enough to make it to a four year university in the first place. If you ever meet one of those people, smack them upside the head for me. I left my community college with a 3.81 GPA and currently hold a 3.97 GPA at the place I transferred to (a University of California). Some of the smartest people that I have met were either at the community college I attended or used to attend a community college. In general, I consider the average intelligence as well as drive and passion for success of a community college student to be higher than that of someone who attended a four year university from the get go. The education that you receive from either place will roughly be the same. (Of course, that isn’t always the case, but I am speaking in generalities. This is an argument that should be saved for another time.)

I spent my spare time working
Throughout most of my college career, up until recently, I had a job. I tried to use as much of my free time as possible to work. I worked anywhere from fifteen hours a week to twenty two hours a week. There was one point where I was working two jobs at the same time. When I wasn’t working at my regular job, I was always looking for money someplace else (legally). I did odd jobs, online surveys, and collected recycling. I did whatever I could to get every penny that I could, because I knew that the more money that I earn now, the less I will have to earn in the future to pay off my debts. Any costs that were not covered by financial aid were covered by the money I made working.

I spent my money wisely
I didn’t take all my hard earned money and squander it. Although community college was cheap, I knew that once I transferred, my costs would multiply dramatically. Keeping that in mind, I invested a bit of my money and saved whatever else I could. I avoided eating out as much as I could and I resisted the urge to buy fancy new gadgets. I only bought what I needed and tried to stay within my post-savings budget.

I saved money on books when possible
When it came to books, I staved off the urge to buy new ones (except for my econ books, as I would be keeping those to use as references). Whenever I could, I purchased my books used and I kept them in good condition so that I could resell them. If I wanted to get maximum return value, I could have sold my books to another person, but I was lazy and instead sold them to the bookstore near campus for about 40% of the books original price. In hind sight, that was a bit of a dumb move. Oh well.

In addition to avoiding new books, I also avoided the campus bookstore like the plague. They have a policy to mark up book prices above the retail price by an astronomical amount (around 50%, depending on where you go). Because of that, I bought most of my books online. I can usually find a brand new book online for a lower price than a used book at the bookstore. Also, if I had a friend that was taking a class that I was going to take and I was taking a class that he was going to take, then we would trade and share books.

That basically sums up how I shrunk down a heavy financial burden into nothing. Coming out of college with no debts to worry about is a definite plus. I don't have to worry about finding a job immediately to start paying down loans and I can take the money that I earn and spend it on myself. Maybe I'll buy a house, or a new car, or save for an early retirement. If you or one of your kids is approaching the time to ship out to college and you’re wondering how in the world you’re going to pay for it, then this can serve as a basic outline to build a plan.

Spending Less vs Making More: Which One Do I Choose?!?! (Part 2)

2011-07-09T08:00:00.000-07:00

This is a continuation of my previous post, Spending Less vs Making More: Which One Do I Choose?!?! (Part 1)

As an Economics major, I do a lot of marginal benefit / marginal cost analysis. What that means is that I basically look at how much will I gain from one additional unit and at what cost. In this case, I’m looking at how much more benefit a dollar will provide me and at what cost. Since the marginal benefit is the same both cases (a dollar is a dollar no matter how you look at it), the difference in the situation lies within what you had to sacrifice to get that dollar. Since everything in our lives is constantly changing, the cost of obtaining that dollar changes too. Sometimes it makes more sense to go the cost cutting route and then sometimes it would make more sense to switch over to making money for a while.

Before I provide you with an example, let me invoke the assumption that as your income goes up, your spending go up as well. As you make more money, you tend to gravitate towards nicer things, you pay more taxes, you reinvest in yourself through education, better technology, etc. This assumption isn’t all that farfetched if you think about it. Obviously there are special cases, but we’ll pay them no mind for now.

Okay so take for example, this fifteen year old boy. Or girl. Whatever suits your fancy. I’m going to call my boy Mike, since that seems like a pretty generic name. Mike currently has no income. If he goes around trying to cut his spending, what is he going to gain? Absolutely nothing, since he doesn’t have any spending money to begin with. Let’s say Mike gets creative and finds a way to make money. Maybe he gets a job or he whines and complains to his parents for allowance money. Once he gets that money, he’s going to start spending that money on things that he likes.

Fast forward. Mike is eighteen now and he’s off to college. He finds out that the money he’s making isn’t sufficient enough to pay for school. Since he doesn’t have time to find another source of income, he decides that now would be a good time to stop spending all his money on video games and cuts his spending to pay for school.

Fast forward. Mike is a fresh new graduate and he’s getting kicked out of his parents’ house. He can’t afford an apartment yet with his current salary, so he needs to find a new job and make more money. Time to put that new degree to use.

Fast forward. Mike has a girlfriend now (let’s call her Michelle) and he’s happy and in love and he enjoys spending his time with her. He plans to propose to her, but he wants to make sure he has enough money to pay for the wedding first. Since he enjoys the time he spends with his girlfriend, he doesn’t want to take any time away to look for another source of income. Looks like it’s time to cut costs again.

Fast forward. Mike is in his late twenties and he is happily married. He and his wife want to buy a house. They have some money saved up, but they want to make as big of a down payment as possible. They also want to be able to afford the mortgage payments on a nice place so their monthly income needs to go up. Mike’s job offers a pay raise for completing a certification course. Now looks like a good time to take it. Mike’s wife is doing some freelance work in addition to her regular day job.

Fast forward. A baby’s arrived! Mike and Michelle need to take time off of work to take care of their newborn child. As result, their pay takes a bit of a hit. With a baby, their costs have gone up. What can they do? I know, they could spend less!

So on and so forth. I’m sure you can see the pattern by now. Although it would have been very possible to stick to just cost cutting or money making his whole life, there were situations where it would be much easier to earn another dollar from a job than to save a dollar in spending (such as the housing example). On the other hand, there were times where the exact opposite was true (such as the baby example).

What you do should depend on the situation that you’re in, not what some financial “expert” who has written a generic book says to do. There is no one simple, easy, catch all method to handling your personal finances. Whoever tells you that is lying to you. If you buy a $4 cup of coffee from Starbucks three times a week, that’s going to cost you $624 over the course of one year. Now, if you can afford to take the time to work to earn an extra $624 just for coffee, then good on you. However, if you have a baby to take care of, then you don’t have a lot of spare time on your hands and that $624 can buy a lot of diapers. What would be the better choice in that situation? Think about it.

Spending Less vs Making More: Which One Do I Choose?!?! (Part 1)

2011-07-08T08:00:00.000-07:00

During the years that I have spent reading and researching about personal finance, I have almost always stumbled upon one of two extreme school of thoughts: Either you already make enough money and you spend it improperly (cost cutting) or you’re making good money, but need to make more if you want to take on new expenses (money making). Occasionally, the advocates of one side will drift into the other, but won’t stay there for long. Thus far, I haven’t really seen anyone truly advocate an ideology where you utilize both extremes. I’m not saying that it doesn’t exist, just saying that I haven’t seen it yet.

Now, before you get too far ahead of me, let me clarify myself by saying this: I am not saying that people should go make lots of money, never spend it, and use their time to count their cash in their basement. I am also not saying that either one of these ways of thought is bad; people have led happy and successful lives and live financially free by following whichever of the two methods have worked for them. What I AM saying is that I believe that there is another way to manage your money without having to explicitly pick which side of the Force you are on.

Let’s take the two original philosophies and break them down a bit to see what we’re working with.

Make More Money Advocates (i.e. I will buy what I want because I can afford it!)
-Making more money means a higher standard of living (good thing)
-Due to multiple streams of income, you are likely to be less affected by negative shocks to the economy i.e. if you get fired from one job, you still have another (good thing)
-There’s a finite cap to your earning ability (bad thing)
-More time has to be allocated to making money (bad thing)
-Can be difficult to find another source of income, especially one that matches your needs (bad thing)

Cut More Costs Advocates (i.e. No you cannot have a $4 latte. Can you pass the coupons please?)
-Cutting costs grants you access to more money without having to put in more work hours (good thing)
-Cost cutting decisions could be made instantly and it is easy to apply (good thing)
-Instant access to money saved; money that you don't spend is still money in your pocket (good thing)
-Time needs to be spent saving for big purchases* (bad thing)
-Limit to the costs that could be cut; you can only save as much as you spend (bad thing)

*Yes, I am well aware that learning about the principles of savings is a good thing, but from an opportunity cost perspective, being forced to save is a bad thing. Instead of sitting in a low yield savings account, the money could be doing other things. No, I do not consider money in a savings account to be an investment, and even if it were, I do not consider investing money to be saving money. More on that another time.

From what I have seen thus far, most people choose to pick one route and stick to it for the rest of their lives. Many people go the cost cutting route since it seems to be a little bit easier than finding a second source of income. The entrepreneurial few usually opt for making more money and sticking with that for the rest of their lives. What I don’t understand is why do people only go for one of the two options? Why not have both? If everything else in our lives is constantly changing, then shouldn’t our personal finance plan change too?

Okay, so this post is turning out a lot longer than I thought it would be, so I’m going to split it up into a two part series. Come back tomorrow if you want to find out the way that I am going to personally handle my finances.