I absolutely need your advises as soon as possible!
The story is that I will be employed by Microsoft (in Ireland) as a contractor in 5 days time now and the recruitment agency which found me the job didn't tell me more about what is required to be a contractor. I mean that I have no idea about the formalities I have to fill in and how long it takes to get them, the agency just advised me to schedule an appointment with an accountant.
So if you could help me solve out my situation and tell me more about the steps to follow to become a contractor I would be very grateful!
I was with you up until the puppy negotiation part. At least you weren't suggesting to bargain with a pound or other way of holding animals until they have to kill them b/c there are too many. The person holding the dog already had to endure a lot of it - bathroom, walks, hair, dirt, scolding, etc. Normally they will get the shots, and if you're lucky, the dog will be spay by then. But come on. You're getting a dog. It's not a peach at the Farmers Market. And even those prices are always low. In order for the market people to show up there to sell you a cheap but juicy peach, they need a few more of your pennies. Otherwise, you're contributing to the oversaturated market of tasteless fruit from China to WallMart.
Okay, that's actually very close to the way my wife and I manage our finances. I just think of it a little differently. (In your example, I'd think of it as budgeting for an extra bottle of nice wine everytime the GST rebate comes in.)
So the question then is: Is there any advantage in thinking of it that way, versus thinking of it as an outside-the-budget splurge that you get for free because it's bought with found money?
As I tried to explain in the article, I think there is an advantage, as long as you think of your budget as a tool for maximizing your satisfaction within real-world constraints (not as being a constraint in its own right). But you may be right that I did so in a preachy way that came across as a criticism of doing things any other way. In fact, I'm a big proponent of any of the numerous little tricks that people use to help them be frugal.
Sorry! And, thanks for helping me clarify my thinking here.
Why does everyone balk at 10%? If you look at the average rate of return (including reinvesting dividends) for the S&P 500 since 1970 it comes to ~11%. I have found numerous mutual funds with 15+ year histories that have an rate of return since inception greater than 12%, so I don't know why people shoot for 8% when just investing in an S&P 500 index fund could get more than that.
The Russell Midcap Value Index has a 10-yr annualized rate of return of 11.70, and the Ariel Fund has a 13.44% annualized return since inception (1986). If you go to Morningstar you'll find that there is a large list of funds with a 10-yr rate of return Greater than 15%. These include funds from fairly well known companies like Fidelity, T.Rowe Price, Vanguard, and Oppenheimer.
....sort of. My wife and I pay ourselves a cash allowance each week. This can go towards anything we like - eating out, wine, new shoes, clothes, accessories for my scooter (that's where I get smug - 70mpg!), going to movies, etc. But when these windfalls come in, we "reward" ourselves with one purchase outside our allowance. When we receive our GST rebates (we're Canadian), we typically buy a bottle of wine for $20, and the other $60 stays where it belongs - in the bank account.
What's cool is that people are always impressed with stuff like this, tastes great and has fruit in it, wow. We always called it "dump cake" with the cans of pineapple and cherries and pecans. Great served right out of the oven with vanilla ice cream. I love Southern cooking anyway. I love reading cook books I get from the library and in particular the older home made recipes. Again, people are so impressed when you serve this stuff.
Wow, thanks for the info and comments, this is right on time for me. I'm seriously thinking about going to green tea from my daily home brewed Walmart french roast coffee and artificial sweetener. I bought a box of green tea from Odd Lots, about 3 bucks for 100 bags (come on, don't laugh, this all tastes pretty good and tightwad that I am, I refuse to pay much more and wouldn't even consider buying anything from Starbucks, why get hooked). Anyway, I noticed right off the bat that my teeth and gums don't bother me as much, not sure how significant this is but I like it. I do know coffee can be dehydrating. It's going without the sweetener that's hard and yes, I have tried stevia. I'm not after living forever, who wants to do that anyway? I'm 52, the blood pressure and lab work are fine, don't drink, don't smoke, some overweight and working on it. I personally think walking and moving around more is the true secret to better health. My grandmother lived till she was 98 and ate and drank whatever she pleased without taking medications. She did cook everything for herself and favored vegetables, however. Sorry to ramble but again, I appreciate the comments on the East/West ideas, very refreshing to hear both sides can be full of you-know-what at times.
Thinking about loan structures is inituitive for some, but not for everyone. For me, it is helpful to see the practical implications of a loan using a spreadsheet.
It's useful to consider underlying assumptions and to see if these assumptions still hold true and how they are applicable to your particular situation: Will the housing market continue to rise?; will I sell my home within a few years? Loans are often structured and sold with unspoken, underlying assumptions. And even what seems risky as a structure may not be all bad. For example, if you can lock in a low initial interest rate on an ARM and you pay extra each month, then you could really pay down your principal quickly and when the rate reset, your monthly payment may still be fairly manageable.
Also, what seems like a imperfect decision at a given point of time may turn out to be a great decision later. Andrea lives in an urban market and though housing prices may be slowing in growth right now, prices are likely increase. Warren Buffett didn't look particularly savvy when he didn't buy tech stocks but after the dot.com bubble burst, he returned to genius status.
I use bookfinder.com. This is a wonderful site that is linked to many, many used book stores nationwide. I have found incredible prices for standard books, and for many hard-to-find out-of-print books too. One book I was recently looking for, a college textbook, I found listed from about 40 different places, ranging from $9 and change to $89! The shipping prices are quite reasonable, and you're dealing with a store, not an individual, so they're pretty reliable on sending you the book.
You should negotiate everything over a certain dollar amount. The rich do it all the time...it's expected...only the middle class and the poor think that "negotiating" is a dirty word! Go in with a wad of cash for your next purchase or service (yes, I negotiated down our cost of lawn treatment too)...I don't have the money you say...then, you probably should not be putting it on your credit card in the first place!
If you go with 5 pounds of sugar in 3 gallons of water, your ordinary baker's yeast will die of alcohol poisoning just as they run out of sugar and starve, so you won't have excess sugar. It's true that you'll have a weaker starting point for your distilation, but as long as energy is cheap, that's not such a big deal. If energy is expensive, then it makes a lot more sense to use brewer's yeast, up the sugar content to match the yeast's abilities, and then having a higher concentration of alcohol as your starting point for distillation.
I think at least some of the sugar must make its way through the distilation process, although I admit that I don't know what the chemical/physical process is--I'm just going by the flavor of some distilled spirits, such as rum and bourbon.
I don't see why that would be. All the extra sugar would do is lower your final yield (right?). You wouldn't even get that sugar in the final product because the alcohol/water mixture would evaporate (and then condense in the tubing) leaving that sugar behind...
I got a friend who is so frugal that he didn't make any budgeting because it is not necessary. There is one time he asked the tire shop owner,"I have no budget for these, do you have any way to offer me the cheapest one?". The businessman replied,"Yes, there are some used tires but still very nice. It is 50% off."
Something regarding hotels that will save you money up front is to ask the price. Most hotels have a set price for the night, a rack rate (lowest possible) and a few in between. The biggest mistake you can make is to say "Well, I have AAA or AARP" right off the bat, because most hotel employees are told that in that situation they are to give out the regular price and refer to it as discounted. This isn't the best practice, but for some of the workers schleping away for minimum wage, they don't argue. Often, they make commissions, so higher prices work for them, too. If you get a price, then mention such-and-such discount, they have to either explain why they were telling you a price and then not adjusting if they honor a discount. Most of these are only a 10% discount, but that is still a few bucks you can save by changing the order of your reservation.
Another point is that remember to be reasonable when you complain about the noise or whatever problem may come up. Basically, the person there is trying, and they have set rules about how to handle disturbances, but I've watched people throw temper tantrums and call the local police to file a noise complaint while not even realizing the noise was something legitimate (like someone coming to their room the first time and the doors shutting under their own power). Given, if there is a problem, complain. Understand, though, that not every person working there can give you a discount (there are some things that do have to wait until morning) - great post though, all the advice is wonderful...
I work at a leading university as director of the dissertations editing office (our students are ESL writers for the most part so we check to make sure eeverything is comprehensible). I see Wikipedia given in the footnotes all the time. I have brought up the matter with the board of directors-- I want them to ban the use of Wikipedia in theses and dissertations, but they said they did not want to micro-manage departments and advisors to that extent. It is exactly fodder like this I need to push my case along. Thank you.
As a number of posters already pointed out, the monthly payment on a mortgage loan, or any other similar loan, like a modern car loan, is merely calculated to let the borrower pay the same amount of money each month until the loan is payed off. The calculation assumes that you pay all the interest you owe on the previous month's balance, plus enough principal to even out the monthly payment. This is the fairest way to calculate a payback as you are only charged interest for the money you use.
Other interest calculation methods assume you pay back the principal in even installments, but make you pay most of the interest near the start of loan, and rebate this interest to you if you pay off the loan early. This is truly a "front-loaded" loan.
Even worse, a negative-amortization loan lets you make a smaller monthly payment by deferring the payment of the interest you owe and tacking it onto the outstanding balance instead. You end up owing interest on the interest. This is how many sub-prime loans work that are causing problems now.
The modern mortgage is truly consumer-friendly. Many states make it illegal to assess prepayment penalties, so you can pay your loans off early without owing any extra interest. Also, banks can't "call the loan", that is, to force you to pay it all back immediately. One reason for the Great Depression was that when the stock market crashed and people couldn't pay back their broker loans, the banks looked for cash by calling in their loans. This meant mortgages, too. Many, many people lost their homes and farms this way.
The only conspiracy is people's willful ignorance of math and how money works.
A lot more people think like you than think like me. I'm quite the odd man out on this point.
I'll also admit that a tendency to smugness is one of my less appealing traits. I don't think I'm smug here, though. (I'm smug about bicycling for transportation.) I sincerely think that treating all your money the same is fundamental to making wise decisions.
Let me ask this: why are the nice things that you buy with windfall money not already in your budget? To my way of thinking, ordinary nice stuff--stuff that you hope to buy one of these days, if all goes according to plan--belong in your budget.
It's true that yeast quantity doesn't matter. But it's also true that baker's yeast will stop functioning at a pretty low alcohol content, whereas stronger yeasts from brew supply shops (I'm not shilling for anybody, pick your own, use champagne yeast, use turbo yeast, use whatever, it's easy to find good sources with simple web searches) will go and go, all the way up to ~20%. If you leave a lot of unfermented sugar in your liquor, you'll end up with a hell of a headache.
Since the yeast reproduce, it almost doesn't matter how much you add--after 20 minutes you've got twice as much, so if you add half as much it changes your total fermentation time from 10 days to 10 days 20 minutes.
All you need to do is add enough that your yeast overwhelms any wild yeast that happen to get in. (There are wild yeast in the air everwhere, so you really can't avoid them.)
And, yes--according to Dolly Freed, 5 pounds of sugar to 3 gallons of water.
...this post just seems off to me. My wife and I have a practice of buying ourselves one nice thing we wouldn't ordinarily buy each time we get a raise or unexpected bonus (new shoes, a couple new shirts for work, etc.). Was it in our budget? No, but the income wasn't either. Yeah, it's "all our money" and if we don't spend every cent of it, we're still better off than we were the day before.
Sometimes Wise Bread comes off preachy and smug - tonight is one of those times.
Where Bach completely misses the boat is his emphasis on the small stuff. Cutting out $5 a day is fine but it is the big financial decisions that will ultimately sway the day in terms of financial health.
He often employs rather unrealistic x factors to make his points more dramatic and seemingly powerful. For example, as the original poster stated, he uses an average of a 10% a year compounded return to inflate the effects of his strategies.
Maybe instead of figuring out how you can squeeze another $1.25 in savings a day people should concentrate their efforts on figuring out how to get a raise or finding a better paying job. Maybe instead of cutting back to seeing movies in a theatre six times a year to three they could focus their attention on analyzing their investment decisions, educating themselves about various investment vehicles and focusing on those areas that will have the largest impact on their financial life.
I'm all for the concept of living well below your means. I am all for pushing forward the idea that it isn't necessarily how much you make but what you do with it that counts. But his philosophy has people focusing on the pennies when they should be concentrating on the dollars.
If someone weren't interested in doing this, how much yeast would(n't) they add? I just don't know how much would be appropriate for 3 gallons. Just double checking, 5 pounds of sugar, correct?
I believe that being disciplined is the most important thing in regards to money. It seems the more we have the more we want to spend. It is important to enjoy life and money is part of that but it is also important to live a balanced life.
I absolutely need your advises as soon as possible!
The story is that I will be employed by Microsoft (in Ireland) as a contractor in 5 days time now and the recruitment agency which found me the job didn't tell me more about what is required to be a contractor. I mean that I have no idea about the formalities I have to fill in and how long it takes to get them, the agency just advised me to schedule an appointment with an accountant.
So if you could help me solve out my situation and tell me more about the steps to follow to become a contractor I would be very grateful!
Cheers,
Natacha
I was with you up until the puppy negotiation part. At least you weren't suggesting to bargain with a pound or other way of holding animals until they have to kill them b/c there are too many. The person holding the dog already had to endure a lot of it - bathroom, walks, hair, dirt, scolding, etc. Normally they will get the shots, and if you're lucky, the dog will be spay by then. But come on. You're getting a dog. It's not a peach at the Farmers Market. And even those prices are always low. In order for the market people to show up there to sell you a cheap but juicy peach, they need a few more of your pennies. Otherwise, you're contributing to the oversaturated market of tasteless fruit from China to WallMart.
Okay, that's actually very close to the way my wife and I manage our finances. I just think of it a little differently. (In your example, I'd think of it as budgeting for an extra bottle of nice wine everytime the GST rebate comes in.)
So the question then is: Is there any advantage in thinking of it that way, versus thinking of it as an outside-the-budget splurge that you get for free because it's bought with found money?
As I tried to explain in the article, I think there is an advantage, as long as you think of your budget as a tool for maximizing your satisfaction within real-world constraints (not as being a constraint in its own right). But you may be right that I did so in a preachy way that came across as a criticism of doing things any other way. In fact, I'm a big proponent of any of the numerous little tricks that people use to help them be frugal.
Sorry! And, thanks for helping me clarify my thinking here.
Why does everyone balk at 10%? If you look at the average rate of return (including reinvesting dividends) for the S&P 500 since 1970 it comes to ~11%. I have found numerous mutual funds with 15+ year histories that have an rate of return since inception greater than 12%, so I don't know why people shoot for 8% when just investing in an S&P 500 index fund could get more than that.
The Russell Midcap Value Index has a 10-yr annualized rate of return of 11.70, and the Ariel Fund has a 13.44% annualized return since inception (1986). If you go to Morningstar you'll find that there is a large list of funds with a 10-yr rate of return Greater than 15%. These include funds from fairly well known companies like Fidelity, T.Rowe Price, Vanguard, and Oppenheimer.
....sort of. My wife and I pay ourselves a cash allowance each week. This can go towards anything we like - eating out, wine, new shoes, clothes, accessories for my scooter (that's where I get smug - 70mpg!), going to movies, etc. But when these windfalls come in, we "reward" ourselves with one purchase outside our allowance. When we receive our GST rebates (we're Canadian), we typically buy a bottle of wine for $20, and the other $60 stays where it belongs - in the bank account.
What's cool is that people are always impressed with stuff like this, tastes great and has fruit in it, wow. We always called it "dump cake" with the cans of pineapple and cherries and pecans. Great served right out of the oven with vanilla ice cream. I love Southern cooking anyway. I love reading cook books I get from the library and in particular the older home made recipes. Again, people are so impressed when you serve this stuff.
Wow, thanks for the info and comments, this is right on time for me. I'm seriously thinking about going to green tea from my daily home brewed Walmart french roast coffee and artificial sweetener. I bought a box of green tea from Odd Lots, about 3 bucks for 100 bags (come on, don't laugh, this all tastes pretty good and tightwad that I am, I refuse to pay much more and wouldn't even consider buying anything from Starbucks, why get hooked). Anyway, I noticed right off the bat that my teeth and gums don't bother me as much, not sure how significant this is but I like it. I do know coffee can be dehydrating. It's going without the sweetener that's hard and yes, I have tried stevia. I'm not after living forever, who wants to do that anyway? I'm 52, the blood pressure and lab work are fine, don't drink, don't smoke, some overweight and working on it. I personally think walking and moving around more is the true secret to better health. My grandmother lived till she was 98 and ate and drank whatever she pleased without taking medications. She did cook everything for herself and favored vegetables, however. Sorry to ramble but again, I appreciate the comments on the East/West ideas, very refreshing to hear both sides can be full of you-know-what at times.
Thinking about loan structures is inituitive for some, but not for everyone. For me, it is helpful to see the practical implications of a loan using a spreadsheet.
It's useful to consider underlying assumptions and to see if these assumptions still hold true and how they are applicable to your particular situation: Will the housing market continue to rise?; will I sell my home within a few years? Loans are often structured and sold with unspoken, underlying assumptions. And even what seems risky as a structure may not be all bad. For example, if you can lock in a low initial interest rate on an ARM and you pay extra each month, then you could really pay down your principal quickly and when the rate reset, your monthly payment may still be fairly manageable.
Also, what seems like a imperfect decision at a given point of time may turn out to be a great decision later. Andrea lives in an urban market and though housing prices may be slowing in growth right now, prices are likely increase. Warren Buffett didn't look particularly savvy when he didn't buy tech stocks but after the dot.com bubble burst, he returned to genius status.
I use bookfinder.com. This is a wonderful site that is linked to many, many used book stores nationwide. I have found incredible prices for standard books, and for many hard-to-find out-of-print books too. One book I was recently looking for, a college textbook, I found listed from about 40 different places, ranging from $9 and change to $89! The shipping prices are quite reasonable, and you're dealing with a store, not an individual, so they're pretty reliable on sending you the book.
You should negotiate everything over a certain dollar amount. The rich do it all the time...it's expected...only the middle class and the poor think that "negotiating" is a dirty word! Go in with a wad of cash for your next purchase or service (yes, I negotiated down our cost of lawn treatment too)...I don't have the money you say...then, you probably should not be putting it on your credit card in the first place!
If you go with 5 pounds of sugar in 3 gallons of water, your ordinary baker's yeast will die of alcohol poisoning just as they run out of sugar and starve, so you won't have excess sugar. It's true that you'll have a weaker starting point for your distilation, but as long as energy is cheap, that's not such a big deal. If energy is expensive, then it makes a lot more sense to use brewer's yeast, up the sugar content to match the yeast's abilities, and then having a higher concentration of alcohol as your starting point for distillation.
I think at least some of the sugar must make its way through the distilation process, although I admit that I don't know what the chemical/physical process is--I'm just going by the flavor of some distilled spirits, such as rum and bourbon.
I don't see why that would be. All the extra sugar would do is lower your final yield (right?). You wouldn't even get that sugar in the final product because the alcohol/water mixture would evaporate (and then condense in the tubing) leaving that sugar behind...
Personally I have more trouble drying my money as after I have put it through the washing machine it gets rather wet.
I got a friend who is so frugal that he didn't make any budgeting because it is not necessary. There is one time he asked the tire shop owner,"I have no budget for these, do you have any way to offer me the cheapest one?". The businessman replied,"Yes, there are some used tires but still very nice. It is 50% off."
Something regarding hotels that will save you money up front is to ask the price. Most hotels have a set price for the night, a rack rate (lowest possible) and a few in between. The biggest mistake you can make is to say "Well, I have AAA or AARP" right off the bat, because most hotel employees are told that in that situation they are to give out the regular price and refer to it as discounted. This isn't the best practice, but for some of the workers schleping away for minimum wage, they don't argue. Often, they make commissions, so higher prices work for them, too. If you get a price, then mention such-and-such discount, they have to either explain why they were telling you a price and then not adjusting if they honor a discount. Most of these are only a 10% discount, but that is still a few bucks you can save by changing the order of your reservation.
Another point is that remember to be reasonable when you complain about the noise or whatever problem may come up. Basically, the person there is trying, and they have set rules about how to handle disturbances, but I've watched people throw temper tantrums and call the local police to file a noise complaint while not even realizing the noise was something legitimate (like someone coming to their room the first time and the doors shutting under their own power). Given, if there is a problem, complain. Understand, though, that not every person working there can give you a discount (there are some things that do have to wait until morning) - great post though, all the advice is wonderful...
Brad
I work at a leading university as director of the dissertations editing office (our students are ESL writers for the most part so we check to make sure eeverything is comprehensible). I see Wikipedia given in the footnotes all the time. I have brought up the matter with the board of directors-- I want them to ban the use of Wikipedia in theses and dissertations, but they said they did not want to micro-manage departments and advisors to that extent. It is exactly fodder like this I need to push my case along. Thank you.
As a number of posters already pointed out, the monthly payment on a mortgage loan, or any other similar loan, like a modern car loan, is merely calculated to let the borrower pay the same amount of money each month until the loan is payed off. The calculation assumes that you pay all the interest you owe on the previous month's balance, plus enough principal to even out the monthly payment. This is the fairest way to calculate a payback as you are only charged interest for the money you use.
Other interest calculation methods assume you pay back the principal in even installments, but make you pay most of the interest near the start of loan, and rebate this interest to you if you pay off the loan early. This is truly a "front-loaded" loan.
Even worse, a negative-amortization loan lets you make a smaller monthly payment by deferring the payment of the interest you owe and tacking it onto the outstanding balance instead. You end up owing interest on the interest. This is how many sub-prime loans work that are causing problems now.
The modern mortgage is truly consumer-friendly. Many states make it illegal to assess prepayment penalties, so you can pay your loans off early without owing any extra interest. Also, banks can't "call the loan", that is, to force you to pay it all back immediately. One reason for the Great Depression was that when the stock market crashed and people couldn't pay back their broker loans, the banks looked for cash by calling in their loans. This meant mortgages, too. Many, many people lost their homes and farms this way.
The only conspiracy is people's willful ignorance of math and how money works.
A lot more people think like you than think like me. I'm quite the odd man out on this point.
I'll also admit that a tendency to smugness is one of my less appealing traits. I don't think I'm smug here, though. (I'm smug about bicycling for transportation.) I sincerely think that treating all your money the same is fundamental to making wise decisions.
Let me ask this: why are the nice things that you buy with windfall money not already in your budget? To my way of thinking, ordinary nice stuff--stuff that you hope to buy one of these days, if all goes according to plan--belong in your budget.
It's true that yeast quantity doesn't matter. But it's also true that baker's yeast will stop functioning at a pretty low alcohol content, whereas stronger yeasts from brew supply shops (I'm not shilling for anybody, pick your own, use champagne yeast, use turbo yeast, use whatever, it's easy to find good sources with simple web searches) will go and go, all the way up to ~20%. If you leave a lot of unfermented sugar in your liquor, you'll end up with a hell of a headache.
I'd add one packet.
Since the yeast reproduce, it almost doesn't matter how much you add--after 20 minutes you've got twice as much, so if you add half as much it changes your total fermentation time from 10 days to 10 days 20 minutes.
All you need to do is add enough that your yeast overwhelms any wild yeast that happen to get in. (There are wild yeast in the air everwhere, so you really can't avoid them.)
And, yes--according to Dolly Freed, 5 pounds of sugar to 3 gallons of water.
tell people 565 bucks for cash
...this post just seems off to me. My wife and I have a practice of buying ourselves one nice thing we wouldn't ordinarily buy each time we get a raise or unexpected bonus (new shoes, a couple new shirts for work, etc.). Was it in our budget? No, but the income wasn't either. Yeah, it's "all our money" and if we don't spend every cent of it, we're still better off than we were the day before.
Sometimes Wise Bread comes off preachy and smug - tonight is one of those times.
Where Bach completely misses the boat is his emphasis on the small stuff. Cutting out $5 a day is fine but it is the big financial decisions that will ultimately sway the day in terms of financial health.
He often employs rather unrealistic x factors to make his points more dramatic and seemingly powerful. For example, as the original poster stated, he uses an average of a 10% a year compounded return to inflate the effects of his strategies.
Maybe instead of figuring out how you can squeeze another $1.25 in savings a day people should concentrate their efforts on figuring out how to get a raise or finding a better paying job. Maybe instead of cutting back to seeing movies in a theatre six times a year to three they could focus their attention on analyzing their investment decisions, educating themselves about various investment vehicles and focusing on those areas that will have the largest impact on their financial life.
I'm all for the concept of living well below your means. I am all for pushing forward the idea that it isn't necessarily how much you make but what you do with it that counts. But his philosophy has people focusing on the pennies when they should be concentrating on the dollars.
If someone weren't interested in doing this, how much yeast would(n't) they add? I just don't know how much would be appropriate for 3 gallons. Just double checking, 5 pounds of sugar, correct?
I believe that being disciplined is the most important thing in regards to money. It seems the more we have the more we want to spend. It is important to enjoy life and money is part of that but it is also important to live a balanced life.