The Simple Dollar
By almost every measure, the stock market in the United States has hit several all-time highs over the last few weeks.
This has led several Simple Dollar readers to write in and ask whether or not now is the time to sell. Tom, for example, writes:
“With stocks being so high I am getting kind of nervous. You know the old saying of “buy low sell high” so I am wondering if I shouldn’t move my retirement savings into bonds or something else low risk for a while."
The “buy low, sell high” maxim is a tempting one to look at right now. With stocks at (or near) an all-time high, it makes sense to look seriously at the “sell high” part of the equation.
The problem with “buy low, sell high” when it comes to something like the stock market is that it is very difficult to tell what the “high” is and what the “low” is. ( Continue… )
One of the biggest fears that people have when they begin investing is that they’re going to make a “dumb” choice and not get the best investment returns that they could get. They fret and worry about this fund or that fund or buying real estate or buying bonds and that fret and worry and indecision keeps them from investing at all.
That’s a giant mistake, and here’s why: it will take a very long time for a poor investment choice to have a significant negative impact on you, but it doesn’t take much time at all for the choice to not invest to have a negative impact on you.
Let’s say, for example, that you’re able to put aside $100 a month for retirement. You can either start putting money aside right now in a investment chosen at random that earns 6% per year (on average), or you can give it six months of study and choose a much better one that returns 7% per year.
How long before the 7% investment catches up with the 6% investment? ( Continue… )
“You know, almost every day I spend a day just ‘living for the day,’ I go to bed feeling like I wasted that day.”
I told my wife this the other night as we were getting into bed. We usually have our best conversations during those ten minutes after we both get into bed but before one of us gets tired enough that the conversation stops and the sleep begins.
Anyway, we chatted for a few minutes about this idea and about some other things, and then as she drifted off to sleep, the idea kept running in my head.
I live most of my life – and find a lot of joy in my life – living for a far-off future day.
It shows up in how I spend my money. I don’t buy too much – in fact, we could basically live on Sarah’s income alone, and we did so in 2012 according to my math. That means every post-tax and post-professional expense dollar I brought in thanks to writing, book royalties, and so on went into savings. 2013 is going to be very close to that, even with the tenth anniversary trip Sarah and I took to Boston. ( Continue… )
This evening, my children will be dressing up and running about in their neighborhood, knocking on doors and requesting candy. If they match last year’s performance, they’ll be bringing home multiple pounds of mini candy bars, Sweet Tarts, and other goodies.
Naturally, they’ll eat a few pieces while they’re out and about – I certainly did when I was their age.
When they get home, though, we put their bags of candy off to the side and get ready for bed.
The next night, things have changed a bit. ( Continue… )
I’m in a situation where I’m married and have three children. For the next decade of my life – at least – I have several other lives to be concerned with when it comes to my financial decisions.
My closest friend, however, is single. He has no spouse. He has no children. He has no one depending on him but himself.
It would not make any sense for the two of us to be making the same financial decisions. We use many of the same strategies – frugality, spending less than you earn, setting up a bright future – but our method of implementing them is very different.
Since I usually focus on the financial choices that I make, I thought it might be interesting to walk through some of the different decisions he makes and why.
His only life insurance is a very small policy he’s had since birth. It will cover his funeral expenses and that’s about it.
Since he doesn’t have any dependents, he doesn’t have any children to worry about or a spouse to leave behind. Thus, there’s no need for an extensive life insurance policy – there’s no one left behind to protect if he were to suddenly pass away. ( Continue… )
The first time I calculated our family’s combined net worth, it was negative. And it hurt.
At that time, we lived in an apartment. Our only significant assets were our two cars, which we had loans on. We also had student loans, plus ample credit card debt.
When you add up those assets and subtract those debts … you don’t get a happy result.
A lot of people freshly out of college face this same difficulty, though, and it’s disheartening. If you think about your situation in the world and realize that if you sold off every single possession you own and you’d still be in debt, it feels hopeless. ( Continue… )
I hear every single day from readers who want to know exactly how I’ve made money with The Simple Dollar or how they can make money doing a similar thing, whether it’s starting a blog or posting Youtube videos or writing ebooks.
I’m going to spell all of this out in detail so that the reality of it is as clear as possible.
First of all, the only way to make money consistently online is to produce a lot of content on a very consistent basis. There’s really no other way to do it with any consistency. Sure, someone might throw a video up on Youtube only to see it go viral and get passed around like crazy, but that type of phenomenon is often completely unexpected and heavily based on luck.
The only way to make it work consistently is to produce content every day – or at least several times a week – and do it over and over and over again. You have to treat it like a second job. ( Continue… )
I was fascinated by this recent discussion at Lifehacker about whether brown-bagging your lunch is really much of a money saver. There were enough good points made on both sides that it really made me question whether or not brown-bagging really is a money saver.
After thinking through the question and running the numbers on quite a few different scenarios, I’ve concluded that, yes, brown bagging can save you money consistently if you do it right.
Let’s walk through the discussion step-by-step.
First of all, brown bag lunches aren’t free. No matter what, when you consume food, it has a cost. The entire argument for brown-bagging your lunch isn’t that it’s free, but that the cost is lower than buying your lunch at a restuarant.
So, to establish whether a brown bag lunch is cheaper, you have to compare the cost of that meal to the cost of eating other lunch options.
If you’re brown-bagging it and bringing something from home to eat, it usually falls into one of three categories.
You’re bringing leftovers. You’ve bagged up a portion of your meal from last night and bringing that to work. In this case, the cost of your meal is the total cost of last night’s dinner divided by the number of meals you got out of it. So, if last night’s dinner covered dinner for your four family members plus your lunch today, then you divide the total cost by five to get the cost of your leftover lunch. ( Continue… )
You want it. You can’t stop thinking about it. You must have it.
You keep visiting websites about it. You find it for sale online and your finger hovers over the button. You see it in a store and you almost can’t tear yourself away from picking it up and holding it in your hands.
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Whatever that item is, you crave it. You want it so bad you can almost taste it. ( Continue… )
The other day, I stopped at a gas station with my children in tow.
Ordinarily, this would be a simple visit – I’d gas up, pay at the pump, jump back in, and we’d be on the road again.
That day, though, my youngest one announced very loudly that he had to go to the potty now. ( Continue… )