What is Digg?35 Comments
- trippinlikegod, on 10/11/2007, -0/+12Another good way to become wealthy is to understand the difference between amortized debts and revolving (compounding) debts. Wasting thousands of dollars every year on credit card interest and home equity loans that compound interest EVERY DAY and in most cases can't be used as a tax write-off is like throwing thousands of dollars in the toilet and flushing it. Take it from me, I'm a loan officer, I deal with people ALL DAY who don't understand the difference. Explaining to someone that a home equity loan (you know the one you took out to help your family) is a credit card leveraged against their house usually makes people a little ill.
- scotus, on 10/11/2007, -3/+13worst piece of advice throughout the entire article: "If it's really necessary to eat out, hit the fast food places until your financial woes are resolved--and then go for the smallest and cheapest item that will fill you up."
Great idea. Fill up on tons of fat, calories and no fresh vegetables. It only costs $2.00! That will be great when you have to spend many thousands on health care when you get older, or die before you get a chance to spend all the money you saved. Look, we already spend much, much less of a share of our salaries on food than we did 50 years ago. There is no rational reason to insist you are saving money by eating unhealthy fast food. Spend a little more. Eat a well balanced diet. You will wind up better off than if you scrimp and save and end up dying at 50 from a coronary. - choppinbroccoli, on 10/11/2007, -0/+8It is pretty easy to be creative in the kitchen with a limited budget. No matter where you go out to eat, part of the cost of the food is to cover the time spent preparing a meal, so buying the same ingredients and preparing it yourself will undoubtedly be cheaper (and most of the time it is healthier too, as long as you don't use too much prepackaged/preservative-laden food).
- Error601, on 10/11/2007, -0/+7Also take some time to learn to read and understand a balance sheet. It gives you a good picture of how a company is doing and if their stock is worth buying. You'll also learn that all the stupid Internet conspiracy theories about companies gouging, charging too many fees, and whatnot are laughable.
- scotus, on 10/11/2007, -1/+7if you havent noticed, most poor people today are obese, not skin and bones and starving. the reason? they eat too much cheap unhealthy food. unhealthy food then leads to major medical problems like diabetes and other nasty things. that is a major problem for our society, because health care costs are spiraling and more people are in need of care. diet is a major part of the reason for this.
i'm not saying $20 lunches. just that people assess their priorities better. I don't think food is a good place to skimp. I'm totally not a health food nut. i just don't think people understand the ramifications of an extremely poor diet. - pktgumby, on 10/11/2007, -1/+6It's better than having 37 kids.
- choppinbroccoli, on 10/11/2007, -0/+4While I think part of this is a misunderstanding, I think that much of America can misconstrue the concept of "total cost of ownership" with "how much is my monthly payment going to be?"
People need to understand that "Can I pay for this?" is an entirely different question than "can I really afford this?"
While a lot of this may have to do with education, it does seem to be a cultural phenomenon as well - we seem to have a tendency to live beyond our means and try to "keep up with the Joneses" instead of build wealth slowly and steadily. - mink78, on 10/11/2007, -1/+5This is a really good article, and should help those of us on the cusp of being somewhat financially secure. Especially after reading the retaliatory spending and spendthrift sections geared to the married folks. My wife and I are both guilty of some of those practices. It seems like every time I buy a new game for the 360 or Wii, my wife ends up with another pair of shoes.
- stuartbryant, on 10/11/2007, -0/+4Don't be afraid to spend money on healthier foods. So what if you save a few bucks? When you're in your 40s and 50s and have chronic health problems, it doesn't matter how wealthy you are -- you often can't just buy a cure. If you're willing to spend a few extra dollars on a new home entertainment system or some new clothes, you should be more than willing to do so with something that you put into your body.
- bobertf, on 10/11/2007, -0/+3@trippinlikegod:
If you shop wisely and cook, you can eat somewhat healthily for close to the price of fast food. Plus, the fast food might be cheap in terms of the price paid, but there is the external cost: potential health implications down the road. At least one economist has attempted to quantify this: A burger apparently is $2.50 more expensive than a salad in the long-run*. Eating well on a small budget could mean a better, longer life.
*Source: http://www.nytimes.com/2005/12/11/magazine/11wwln_freak.html?ei=5088&en=6e1411b1c38f2b0e&ex=1291957200&partner=rssnyt&emc=rss&pagewanted=print) - aebcoat, on 10/11/2007, -0/+3Yes, I agree about charging to the CC for everything as long as you pay it in full monthly, If you cant pay it in full its a waste, probably counterproductive
@orangysb I had to digg yours down, You are correct in the sense that no high yield savings account gives more return then the 18% charged by the CC companies, But if you will pay in full every month then the interest rate on the CC doesn't really matter, So if I spend $1000 on something July 1st and pay in cash or check then that 1000 is gone.from my account at that time, however if I drop that 1000 on a credit card I have about 30 days (1 month) before I have to pay it off without paying any interest, therefore the 1000 can sit in a savings account collecting 5% interest.
Doing the math...
5% a year / 12 months is about .42% per month. So .0042 * 1000 is $4.20
I just saved $4.20 by not paying cash, not much but over the years it can add up alot. Basically if you always pay your CC's in full you are basically taking a short loan from the CC company at 0% interest while allowing your money to grow.
Remember though, If you miss payments or purchase stuff with a CC that you couldn't afford with cash then Credit cards will get you in a mess. - orangysb, on 10/11/2007, -0/+3my bad, didn't think of it that way
ya that makes much more sense - feeman4life, on 10/11/2007, -1/+3Wow, I finally see some intelligent comments and responses to a post!
Very informative financial information =) - leer317, on 10/11/2007, -1/+3"Divorce: A Really Effective Way to Prevent Wealth"
... unless you're a woman... - yzerizef, on 10/11/2007, -1/+3This really is an excellent article. It gives the average person enough knowledge to get by in life financially without going into the boring details. As a finance dork, I give this article the thumbs up as an introduction to personal finance.
- inactive, on 10/11/2007, -5/+6As the coolest person in the world, I liked this article.
- bacon_skoda, on 10/11/2007, -1/+2I don't get why poor people or people in financial mess decide to own a dog.
- specialK16, on 10/11/2007, -0/+1I'm just 18 and soon I'm going to have my first job for the first time. I guess I'll have a good salary, considering that I still live with my parents, and they pay my university, but I won't be a salary that will let me buy a new car or an apartment in the next 6 months. I'm planning to buy some stuff that I've been wanting for a long time (the usual stuff for someone my age; new gfx card, cellphone, gadgets).
So I have some options. Just buy what I can, and leave some money for food and going out. OR get a CC card and spend, trying to keep up. Everyone says credit cards are teh evil, but I happen to think that with some order you can use a credit card to buy more than you would normally do, in other words, a credit card gives you more purchaing power.
BUT, I also NEED to buy a car or a bike, a transportation medium, cause public transportation in here is both a hassle and a risk, and in the long term, a couple of years or less, I want to get an apartment.
All this, and take into consideration that I also need to buy stuff for school (my parents only take care of the scholarship, which in central america, a private university is close to 10% of what a good university in the states costs yearly). Books are expensive, and I want to get some certifications before I finish my B.S.
So yes, I'm in the middle of some serious questions about interests and things like that.
And well, regarding the article, I'm looking into investing in the long run, but sometimes I wonder if I should leave that to professionals, like a stock broker. - microview2007, on 10/11/2007, -0/+1Wait! I can sell this same information on a 30 minute infomercial spot, showing bikini clad women on high price boats with me next to my beamer and make millions!!!!
- pktgumby, on 10/11/2007, -0/+1And the number one way to get moderately wealthy.....submit an article to Digg with a "Make a Donation" button at the bottom :)
- doppenhe, on 10/11/2007, -0/+1"When I first started buying corporate bonds last year, I was so taken by the yield (exceeding 7% annualized yield to maturity) on some Ford bonds due in 2007, that I bought $150K worth of them. Subsequent purchases of corporate bonds have been in smaller chunks--$30K or $50K per bond. But because I have so much tied up in an automobile industry bond, I am reluctant to buy any GM bonds (which are usually somewhat lower yields). Ford and GM aren't likely to both go belly up, but let's say that someone perfects the teleportation disks in Larry Niven's novels...."
Very interesting article but as you can see he did dig himself into hole, the auto industry is dead... - inactive, on 10/11/2007, -0/+1Read up a bit on consumerism. It is a fairly new phenomenon in the long history of mankind.
Think, really think, about what it is you need. Think about the opportunity cost of every dollar you spend.
If I had started out at your age with the deep distrust I have of consumerism now, I'd be very wealthy. In the long run of things I have come to see money as insurance and I've realized I "need" very little. In the analysis of whether to give up some of my insurance or to buy a "thing" it is pretty rare that the "thing" wins out. AND I am here to tell you that you can even convince women that this philosophy makes sense.
It is tough to relearn how to define one's self apart from consumerism. ESPECIALLY tough to do in America. - aserer511, on 10/11/2007, -4/+4The Jim Cramer version:
BOOOOOOOOOOYA MAD MONEY BUY MY BOOK WOOOOOOOO - theNthDoctor, on 10/11/2007, -2/+2Thank you, onicm!
- scotus, on 10/11/2007, -2/+2i also totally disagree about the credit card thing. If you have any self control, charge everything then pay it off every month. Shouldn't be that hard to do. That way you earn points as well, and can have the money that you would have paid immediately sit in a high-interest savings account a little bit longer. this article is pretty lame.
- jockser, on 10/11/2007, -2/+2No way I'm getting rid of my dog or my dog's psychiatrist.
- orangysb, on 10/11/2007, -2/+2mind telling me which high-interest savings account gives higher interest rate than a credit card?
if there is why even bother repaying? how the hell do you think credit card companies and banks earn money? - wjackson, on 10/11/2007, -1/+1CSS FTW
- MikeonTV, on 10/11/2007, -3/+1I'm just commenting so I can find this in my profile later. Unfortunatly I only have sound on my computer at work. When I get home I will read it from the PC there. I hope this worked. I hit tab 47 times.
- trippinlikegod, on 10/11/2007, -5/+1There's two sides to that story though. Spend too much money on anything and your dollars left for the necessities begin to wane. So maybe a cheeseburger isn't the best thing to put in your body but not everyone can afford $20 to eat lunch. Hell some people can stretch that $20 to last them the better part of a week. Bottom line if you can afford to take really good care of yourself than you will, you will eat right, you will get checkups regularly, have the prescriptions you need. If you don't have enough money to go out for lunch once in a while you probably don't have the funds to properly take care of yourself anyway. I'm not going to pretend I know the numbers and make up a statistic but a lot, a huge number of Americans, are without health care and even many of the ones who do have it cannot afford proper treatments, medications, etc. Don't be so quick to judge, just because your lawn is green and lush doesn't mean your neighbors is too. Poverty kills more people than cheeseburgers, bottom line.
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