The Internet is both a good and bad thing for shoppers. I can do it whenever I want, it's very convenient, and I can do it from the comfort of my own home. I save time, gas and time. What could be better?
The same things that make online shopping so great are also what make it so bad for the budget or my financial goals. If there is a down time, I can just browse sites and see what is out there. It's so easy to buy, I can just browse, select and then press one little button to buy and then it arrives a short time later. What could be better?
But, the same reason why I avoid malls and other shopping centers is to avoid temptation. If I don't see it, then I'm not tempted to buy, and I'll never miss what I never see, which is why I never really adopted going to the mall as a pastime.
If I do find something online that I want, then I can at least mitigate the damage by doing a bit of due diligence and search for the lowest price and then see if I can find additional discounts. I tend to fill my cart first, then see if a rebate is available. Favorite sites are ebates and fatwallet. Sometimes one site offers a slightly higher discount than the other. I find that the rebate is slightly more reliable through ebates than fatwallet and the customer service at ebates is much better.
What is an ebate? It's like a rebate but it's for online retailers. Generally, it's an affiliate program where they (ebates or fatwallet) likely get a percentage of your purchase and they in turn pass a portion or a percentage back to you. One requirement is that once you decide to purchase you have to go on to their site, select the merchant and then there is a tracking ticket as you are pushed to the merchant's site for the purchase. Generally, the discounts are between 1% to 5-6%. Sometimes on special occasions, it can go up to 15%. Once you purchase from the merchant, you get a notice from ebates or fatwallet letting you know how much you will be getting back from the merchant.
Redemption varies. At fatwallet, after each purchase, the cashback is pending for a period of time (generally after the return period is over), and once it's available you can designate where you want them to send you the cash (it can be a gift certificate or cash to your paypal account). At ebates, they generally send you the cash after each quarter, but only if you have at least $5 worth of cash back.
I have to admit, I was a bit creeped out when I first learned about these sites and I didn't like the idea of someone tracking where I went and what I purchased, but I got over it quickly when I realized how much I was saving.
Saturday, July 2, 2011
Saturday, June 25, 2011
Value of Time
Earlier, I posted about starting a garden, but then I thought, what was the "true" cost of having a garden?
Each tomato plant cost around $4 and the strawberry plants cost around $5 for a set of 3 strawberry plants and I hope to yield enough to cover the cost of each plant. But, I started to think about the cost of my time in terms of tending to the plants, making sure I gave them enough water, picked the fruits when ripe (before the birds or squirrels got to them).
If I were to calculate the time and energy spent times and the yield versus the cost of the same fruit and vegetables at the market, would I actually come out ahead? Probably not. I didn't pick low maintenance plants. These plants needed to be watered daily, pruned and the fruit had to be picked. In any case, it didn't really matter in some ways. There are intangible benefits to growing my own food. I feel some some satisfaction in growing my own food and having fresh fruits and vegetables that I know is pesticide-free. Also, I feel like a little kid. I love watching the whole process. The trees and plants bloom and flower and then I can see tiny buds that eventually turn in fruits or vegetables.
I'm eagerly waiting for the figs to ripen. Can't wait.
Each tomato plant cost around $4 and the strawberry plants cost around $5 for a set of 3 strawberry plants and I hope to yield enough to cover the cost of each plant. But, I started to think about the cost of my time in terms of tending to the plants, making sure I gave them enough water, picked the fruits when ripe (before the birds or squirrels got to them).
If I were to calculate the time and energy spent times and the yield versus the cost of the same fruit and vegetables at the market, would I actually come out ahead? Probably not. I didn't pick low maintenance plants. These plants needed to be watered daily, pruned and the fruit had to be picked. In any case, it didn't really matter in some ways. There are intangible benefits to growing my own food. I feel some some satisfaction in growing my own food and having fresh fruits and vegetables that I know is pesticide-free. Also, I feel like a little kid. I love watching the whole process. The trees and plants bloom and flower and then I can see tiny buds that eventually turn in fruits or vegetables.
I'm eagerly waiting for the figs to ripen. Can't wait.
Friday, June 24, 2011
Garden
We needed to do something with our backyard. It's pretty bare and we haven't decided what we wanted to do landscaping-wise, so I decided to put in a small garden. Our cherry tree needed a pollinator and so my interest in a with a garden started.
I was always curious about growing our own food, but I always procrastinated. I wondered how much of a commitment it would be to tend to the plants, water them, trim them, and gather the fruits and vegetables. Plus, I had to contend with my black thumb. Also, I wasn't sure when was the best to plant.
Browsing OSH and them Summerwinds Nursery, I decided to take the plunge. The following plants came home with me: brandywine heirloom tomatoes (3), squash, strawberry (6), a couple of blueberry bushes and a lapin cherry tree. I had no idea there were so many varieties of cherry trees and strawberry plants! Let's see how this works out.
So far, I've been watering the plants on a daily basis and I don't think any of the plants have died so far. The tomato plants are starting to bear fruit and I can't wait until they ripen. I was a bit worried about the weather (it was so cold for so long and then suddenly summer appeared), but the plants seem pretty resilient.
I was always curious about growing our own food, but I always procrastinated. I wondered how much of a commitment it would be to tend to the plants, water them, trim them, and gather the fruits and vegetables. Plus, I had to contend with my black thumb. Also, I wasn't sure when was the best to plant.
Browsing OSH and them Summerwinds Nursery, I decided to take the plunge. The following plants came home with me: brandywine heirloom tomatoes (3), squash, strawberry (6), a couple of blueberry bushes and a lapin cherry tree. I had no idea there were so many varieties of cherry trees and strawberry plants! Let's see how this works out.
So far, I've been watering the plants on a daily basis and I don't think any of the plants have died so far. The tomato plants are starting to bear fruit and I can't wait until they ripen. I was a bit worried about the weather (it was so cold for so long and then suddenly summer appeared), but the plants seem pretty resilient.
Saturday, July 31, 2010
401(k) Part III - How Much to Contribute?
When I was given information about my company's 401(k) plan, I was given an option to put a certain percentage of my income into the plan. Investing in a Roth 401(k) wasn't an option then so I only had the option to invest in a traditional 401(k) plan.
What could I afford to put into the plan? Ideally, I wanted to put 10% of my gross earnings into the plan, but could I afford to put that much into the plan? This was when I was going to put what I had learned from the book, The Wealthy Barber, into practice. 10% seemed like a lot. I was just starting out in my career, and I had expenses to pay: rent, utilities, car payments, food,entertainment . How would I be able to pay for all of these things if I automatically took out 10% of my income?
At the end, I decided to bite the bullet and elect to deposit 10% of my earnings into my 401(k) account. There are several reasons why I decided on 10%:
What could I afford to put into the plan? Ideally, I wanted to put 10% of my gross earnings into the plan, but could I afford to put that much into the plan? This was when I was going to put what I had learned from the book, The Wealthy Barber, into practice. 10% seemed like a lot. I was just starting out in my career, and I had expenses to pay: rent, utilities, car payments, food,
At the end, I decided to bite the bullet and elect to deposit 10% of my earnings into my 401(k) account. There are several reasons why I decided on 10%:
- If I didn't do it then, then I doubted whether I would ever be able to put that much into my account,
- I was committed to the idea of saving for my retirement and this was just the first step,
- I wanted to start off with 10% and then eventually increase the percentage, to eventually be able to max out my contributions,
- My employer did not match my contributions, so I had to put in enough to eventually reach my long term goal of having at least enough to retire, and
- I wanted to learn to live below my means and having money deducted before I can even get my hands on it, will force me to live within or even below my means.
Farmer's Markets
Today we went to the Sunnyvale farmer's market that is located at the Caltrain station by the historic Murphy Street. It's a bit sad - the farmer's market used to be on Murphy Street, but when they were doing construction on Murphy Street, he farmer's market was moved to the Caltrain parking lot and now it's going to stay. I'm sure the businesses on Murphy Street are missing the foot traffic.
The farmer's market is a great way to support local farmers. I'm not sure if I save money at a farmer's market, but I like knowing that the fruit and vegetables are fresh (or at least that is my assumption), I'm able to choose a variety of food and I can find organic produce. Also, I'm able to connect directly with the growers, chat a bit and maybe get an idea of how they grow their produce, and then I feel a bit more of a connection to my food.
I started out with $40, and by the time I was done I was left with $8.85. What did I spend my money on?
I started with a fruit stand and all of the fruits are $2/lb. They say that they grow their fruits without pesticides and in way, that is good enough for me because the fruit at this particular stand is outstanding. There is so much to choose from, white nectarines, white peaches, plums (various kinds), grapes and oranges. It's almost too much. I pick out some nice hard sweet white nectarines, and I end up with around 3.25 lbs., which comes out to $6.75.
Next, I try strawberries from 2 different stands that sell organic strawberries. I guess I insist on organic when it comes to certain fruits and vegetables, like strawberries. Generally, when a fruit or vegetable has a very thin skin, I tend to buy the one that was grown organically. Apparently, pesticides and other herbicides can easily penetrate the skin. The Daily Green blog lists the fruits and vegetables that have the highest pesticide residue and recommends buying organic when buying such fruits or vegetables. Fruits like peaches, strawberries, apples, blueberries and nectarines and vegetables such as celery, bell peppers and spinach should be organic. It's scary to think of the amount of pesticides/herbicides we consume on a daily basis and I can only wonder at the cumulative effects. I would like to organic for everything, but it's just not within my budget, so I just try to target the things that should be organic.
So, I finally decide on a stand based on a taste test. One stand had sweeter strawberries. So, for $8, I was able to get 3 baskets of strawberries. A bit pricey, but I love strawberries.
Next, I go to one of my favorite stands, the Happy Boy Farm stand. They have really good heirloom tomatoes this time of year. I was disappointed with the tomatoes the last couple of weeks, but today, they had some nice, ripe brandywine tomatoes (these are great for making tomato sauce for pasta). They are expensive - $3.50/lb, but worth it. I get around 3 lbs., and I spend another $10. A bit steep, but this can be one meal for my whole family (plus some pasta).
Next, on to the Pinnacle stand. I can buy organic produce here and they have good prices. I didn't find anything that I needed, but I generally buy carrots, broccoli and other staples here.
Since I wanted to make my pasta sauce, I was in search of a stand that generally just sells herbs. I find it and I bought some organic basil for $1.50. I also bought some purple garlic from a small stand for $1.
There's an exotic fruit stand. While $2/mango is a bit steep at least it saves me a trip to the store. Sometimes, you just have to factor in the value of your time....
Last but not least, I bought some Italian broccoli. I like this broccoli because it is tender and thus great for my little ones. I grabbed a few handfuls, and at $4/lb, it came out to $1.90.
So, for a grand total of $31.15, I was able to buy fruit for the week, enough for dinner and a side for another dinner. The fruit was a bit pricey, but I was able to get fruit that my family actually likes and is willing to eat (priceless). Sometimes the fruit at the supermarket is just tasteless, maybe they take it off the branch/vine too soon so that it ripens en route, but at a farmer's market, it seems like they allow the fruit to ripen on the branch longer.
The farmer's market is a great way to support local farmers. I'm not sure if I save money at a farmer's market, but I like knowing that the fruit and vegetables are fresh (or at least that is my assumption), I'm able to choose a variety of food and I can find organic produce. Also, I'm able to connect directly with the growers, chat a bit and maybe get an idea of how they grow their produce, and then I feel a bit more of a connection to my food.
I started out with $40, and by the time I was done I was left with $8.85. What did I spend my money on?
I started with a fruit stand and all of the fruits are $2/lb. They say that they grow their fruits without pesticides and in way, that is good enough for me because the fruit at this particular stand is outstanding. There is so much to choose from, white nectarines, white peaches, plums (various kinds), grapes and oranges. It's almost too much. I pick out some nice hard sweet white nectarines, and I end up with around 3.25 lbs., which comes out to $6.75.
Next, I try strawberries from 2 different stands that sell organic strawberries. I guess I insist on organic when it comes to certain fruits and vegetables, like strawberries. Generally, when a fruit or vegetable has a very thin skin, I tend to buy the one that was grown organically. Apparently, pesticides and other herbicides can easily penetrate the skin. The Daily Green blog lists the fruits and vegetables that have the highest pesticide residue and recommends buying organic when buying such fruits or vegetables. Fruits like peaches, strawberries, apples, blueberries and nectarines and vegetables such as celery, bell peppers and spinach should be organic. It's scary to think of the amount of pesticides/herbicides we consume on a daily basis and I can only wonder at the cumulative effects. I would like to organic for everything, but it's just not within my budget, so I just try to target the things that should be organic.
So, I finally decide on a stand based on a taste test. One stand had sweeter strawberries. So, for $8, I was able to get 3 baskets of strawberries. A bit pricey, but I love strawberries.
Next, I go to one of my favorite stands, the Happy Boy Farm stand. They have really good heirloom tomatoes this time of year. I was disappointed with the tomatoes the last couple of weeks, but today, they had some nice, ripe brandywine tomatoes (these are great for making tomato sauce for pasta). They are expensive - $3.50/lb, but worth it. I get around 3 lbs., and I spend another $10. A bit steep, but this can be one meal for my whole family (plus some pasta).
Next, on to the Pinnacle stand. I can buy organic produce here and they have good prices. I didn't find anything that I needed, but I generally buy carrots, broccoli and other staples here.
Since I wanted to make my pasta sauce, I was in search of a stand that generally just sells herbs. I find it and I bought some organic basil for $1.50. I also bought some purple garlic from a small stand for $1.
There's an exotic fruit stand. While $2/mango is a bit steep at least it saves me a trip to the store. Sometimes, you just have to factor in the value of your time....
Last but not least, I bought some Italian broccoli. I like this broccoli because it is tender and thus great for my little ones. I grabbed a few handfuls, and at $4/lb, it came out to $1.90.
So, for a grand total of $31.15, I was able to buy fruit for the week, enough for dinner and a side for another dinner. The fruit was a bit pricey, but I was able to get fruit that my family actually likes and is willing to eat (priceless). Sometimes the fruit at the supermarket is just tasteless, maybe they take it off the branch/vine too soon so that it ripens en route, but at a farmer's market, it seems like they allow the fruit to ripen on the branch longer.
Sunday, July 25, 2010
401(k) Part II - Analysis of Funds
I started contributing to my 401(k) as soon as I started my first job. It was a little daunting trying to figure out what mutual funds to invest in.
As I was just starting to invest, I wanted to look at some resources to evaluate my options, and to figure out how to allocate my investment.
Morningstar
Whenever I consider a fund, I look at the rating from Morningstar. Morningstar is an independent investment research firm that when rating funds, looks at peer data for similar funds and rates their performance against such peers. Their ratings system is very simple, they give a mutual fund between 1 star (worst) to 5 stars (best).
For instance, I currently invest in Perkins Mid Cap Value T (JMCVX)*, and Morningstar gave it 5 stars.
Expenses
What is the expense ratio for the fund? I look for expense ratios of 1% or lower, unless it is an exceptional fund. The Perkins fund actually has an expense ratio of 1.11%, which is higher than my targeted expense ratio, but it was the only good mid-cap value fund option. I like to allocate my investments across different types of funds (large-cap, mid-cap, foreign stocks and bonds), which I will discuss later.
Manager
If' I'm looking at the past returns, I am also looking at the manager. Although past returns is no guarantee of future performance, if the fund has the same manager in the past, then there is some assurance that the guiding principles for the manager will still apply and the performance for the fund will likely be consistent; however, if a new manager has taken over, then past performance has no value. The Perkins fund has two principal managers, who had been there at least since 2002.
Style Map
I look at the character of the fund, whether it primarily invests in large-cap, mid-cap, foreign companies or bonds. The Perkins fund was considered to be a mid-cap value fund, which means the managers look for mid-sized companies that have a potential for growth.
Performance
Although past performance is not indicative of future performance, I generally look at the track record for as long as the manager has been with the fund. For instance, with the Perkins fund, I looked at past performance for the past year, and for the past 5 and 10 year and since its inception since one of the managers had been there since its inception. Comparing its performance against an index fund is also informative (on the Janus site, it compares the fund to the Russell index). Since its inception, the Perkins fund had returned 11.92% since 1992, as compared to the Russell index fund, which generally returned 6.76%. Not bad.
* this is not an endorsement. This reflects my own personal investment and opinion about the fund. Please invest at your own risk.
As I was just starting to invest, I wanted to look at some resources to evaluate my options, and to figure out how to allocate my investment.
Morningstar
Whenever I consider a fund, I look at the rating from Morningstar. Morningstar is an independent investment research firm that when rating funds, looks at peer data for similar funds and rates their performance against such peers. Their ratings system is very simple, they give a mutual fund between 1 star (worst) to 5 stars (best).
For instance, I currently invest in Perkins Mid Cap Value T (JMCVX)*, and Morningstar gave it 5 stars.
Expenses
What is the expense ratio for the fund? I look for expense ratios of 1% or lower, unless it is an exceptional fund. The Perkins fund actually has an expense ratio of 1.11%, which is higher than my targeted expense ratio, but it was the only good mid-cap value fund option. I like to allocate my investments across different types of funds (large-cap, mid-cap, foreign stocks and bonds), which I will discuss later.
Manager
If' I'm looking at the past returns, I am also looking at the manager. Although past returns is no guarantee of future performance, if the fund has the same manager in the past, then there is some assurance that the guiding principles for the manager will still apply and the performance for the fund will likely be consistent; however, if a new manager has taken over, then past performance has no value. The Perkins fund has two principal managers, who had been there at least since 2002.
Style Map
I look at the character of the fund, whether it primarily invests in large-cap, mid-cap, foreign companies or bonds. The Perkins fund was considered to be a mid-cap value fund, which means the managers look for mid-sized companies that have a potential for growth.
Performance
Although past performance is not indicative of future performance, I generally look at the track record for as long as the manager has been with the fund. For instance, with the Perkins fund, I looked at past performance for the past year, and for the past 5 and 10 year and since its inception since one of the managers had been there since its inception. Comparing its performance against an index fund is also informative (on the Janus site, it compares the fund to the Russell index). Since its inception, the Perkins fund had returned 11.92% since 1992, as compared to the Russell index fund, which generally returned 6.76%. Not bad.
* this is not an endorsement. This reflects my own personal investment and opinion about the fund. Please invest at your own risk.
Saturday, July 24, 2010
Secrets of Extreme Savers
I was reading the "Secrets of Extreme Savers" article in CNNMoney, and I was struck by the ability of these people to save so much. The main principle was to live below your means and make savings a priority.
The first family profiled, Ed Haskell and Debbie Chasteen, were able to save about 50% of their after tax income. They paid cash for everything (even their house!) I was filled with feelings of awe - they put to practice what most people give lip service to. It seems like they had a goal in mind, to have financial stability so that they can retire early and it definitely takes a lot of discipline to put into practice those goals.
When I started to look more carefully, I realized that most people seemed to live in areas where there is a lower cost of living. In the Bay Area, the cost of living is so high. One who was profiled lived in Los Altos Hills, but then I read that he was a lawyer and I was like, of course they could save so much! He probably makes so much!
I had to catch myself then and not turn into a skeptic and make excuses. It was still amazing that these people made saving priority. Of course, each of the people profiled could have spent what they made or more.
Looking more closely at their profiles, I knew that I had to start thinking about how to adopt the following principles:
The first family profiled, Ed Haskell and Debbie Chasteen, were able to save about 50% of their after tax income. They paid cash for everything (even their house!) I was filled with feelings of awe - they put to practice what most people give lip service to. It seems like they had a goal in mind, to have financial stability so that they can retire early and it definitely takes a lot of discipline to put into practice those goals.
When I started to look more carefully, I realized that most people seemed to live in areas where there is a lower cost of living. In the Bay Area, the cost of living is so high. One who was profiled lived in Los Altos Hills, but then I read that he was a lawyer and I was like, of course they could save so much! He probably makes so much!
I had to catch myself then and not turn into a skeptic and make excuses. It was still amazing that these people made saving priority. Of course, each of the people profiled could have spent what they made or more.
Looking more closely at their profiles, I knew that I had to start thinking about how to adopt the following principles:
- separate wants from needs and really think about each purchase,
- save for each purchase,
- think about multiple streams of income (if possible),
- have a goal in mind, whether it is early retirement or freedom,
- live modestly (or reset expectations), and
- prioritize.
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