Tim Ferris (of 4 Hour Workweek fame) has said that anyone can become an expert in a year, if they devote themself fully to that area and are smart about their approach. I tend to believe him.
Really, if you could devote yourself fully to one area (say, mountain-climbing or speaking French) with really good teachers and a chance for immersion, you'd definitely be very far along in a year.
I did see that episode (I think it was the one with the Coupon Mom on it, too.) My friend, however, was on a morning talk show quite awhile ago. They didn't even discuss her finances, just showed her grocery shopping with the kids and then had her sit with this "expert" while the expert spouted off very generic tips that may or may not have even applied to my friend.
I've heard that some of the tips on the Oprah show were getting backlash for being impractical, but I think that Coupon Mom's system is very practical, depending on the area you live in. We only have one store near us. It is over-priced, but does offer double coupons. The downside is that they won't double them for any item that is on sale. :(
I am about to come into a small inheritance, one that is getting smaller by the day (parent's retirement account). My strategy will be to live off the inheritance (which is small enough to be tax-free), while banging as much of my taxable salary as the law will allow into my company's sweet 401K plan (6% matching) during this market trough.
The article asks: How did house prices get too high?
The prices got too high for the same reason most prices go up: the demand increased.
Why did the demand increase? The demand increased because more people qualified for loans to buy a home.
Why did more people qualify for loans? The Clinton Administration felt everyone had the "right" to own a home. They made it easier for these people to qualify for loans. This is the real root cause of the problem.
Having worked in a central bank and having had the chance to talk to some of the senior economists (I'm not an economist) my perceptions changed.
The media seem to put an aura around central bankers as all knowing and powerful. I remember distinctly in the late 90's the fascination with every sentence uttered by Alan Greenspan. I can tell you quite plainly they don't deserve it. They are regular people just like you and me. They make mistakes just like you and me as well.
Let's not forget why we are in this financial mess in the first place. Excessively low interests and the general population's belief that house prices would rise forever. I can tell you there are smart economists with some of the best university degrees who bought property right at the peak.
I don't think central bankers are evil or incompetent. They all believe they are doing the right thing. The trick is to ignore the fluff in the media and focus on yourself.
Get out of debt. Build up savings. Buy assets of value and be mindful of risk.
Normally a larger money supply will lower the value of the dollar, simply through ordinary supply and demand.
However, since changing the money supply has other economic effects, there will be some circumstances when increasing the money supply makes the US a more attractive place to invest money. If that results in large numbers of foreigners wanting to buy dollars to invest in the US, it can end up pushing up the value of the dollar.
Just now the current economic crisis has made the US seem like a safer place to invest, attracting some "safe haven" flows into the US and forcing up the value of the dollar. I talk about that some in my most recent post:
thanks for the links, Philip. I expect what we'll see in the future depends on who's in charge, and how far off the next bubble forms - by that time people may have forgotten the housing bubble. Or, if the recession lasts for years, people may be so happy for the upturn of a bubble that there will be too much public pressure against even a small contraction.
I watched the Thriftiest Family in America episode this week and was not all that impressed with the family featured -- why was it being touted that living on $58k AFTER TAXES AND RETIREMENT CONTRIBUTIONS was a challenging thing? They didn't even live in an expensive area. They touted the amount of savings they had in their retirement accounts, but again, that money wasn't even part of their stated income.
Then again, I didn't see any problem with the advice they offered the other family -- it wasn't new to me of course, but it seemed fine.
I'm always amazed at some of the negative comments left on Wise Bread and other blogs.
I like to look at blog posts as the opinion of the blogger based on their experience. That experience may or may not be similar to mine. I've never felt that I had to agree with every blog I've ever read, but neither do I feel that I should trash a post because I disagree. Most of the time I glean some great information off of blogs.
In Life there are so many variables. In my mind even a true expert can't be right 100% of the time for every situation. Everyone on Wise Bread is doing a great job! Ignore the haters.
When I lived in Tampa several years ago there was a two weeks course offered on How to Become an Expert in Six months. When I hear/read questionable “expert” opinions, I often wonder whether they attended such a course or they truly speak from experience. Testimonials and unique, smart advice grab my attention. I always ask, “Tell me something new, something that can improve my life or entertain me”; for that reason I like reading the Wisebread website.
yeah i work at mcdonalds and i have every piece except for the ones listed above and i got them in like 2 days. so there really easy to get. its a total rip off.
I know that if the money supply is too great, the cost of things goes up, a.k.a. inflation. I recently read somewhere (and unfortunately can't remember where!!) that when the government injects money into the system, that the USD actually gains against other world currency, at least temporarily (or maybe artificially?). Can you help explain this phenomenon?
We gave not having a TV a shot and LOVED it!
We don't have one. I highly recommend giving it a try. It saves tons of time and everyone knows that time is money!
~The Bargain Shopper lady
Thanks for this excellent article! I think my parents did everything on this list, except for the family vacation planning part. I cannot thank them enough, as I've been managing my finances since I was a pre-teen, and was financially independent by the time I went to college (with the help of financial aid). Now in my mid-20s, I have no debt except for student loans, I've maxed out my 401k and Roth this year, and am saving for a down payment on a house.
When I have children I am definitely raising them to be similarly financially responsible, and you've laid out the steps in a very organized fashion.
Thanks for a great Nora,
It never ceases to amaze me how with our kids things are more caught than taught!!
I do however believe that we need to find ways of teaching them about money praticularly as there is a concerted effort now to get them to live beyond their means by offereing cheap credit and bombarding them with consumer marketing material.
Even if credit dries up it will only be a short term issue because people use debt as a means of making a living i.e. banks , credit cards etc and therefore as soon as they can they will try and sell into new markets i.e. our children.
I know the four big banks in our country all try and get children to open accounts with them for the purpose of depositing money but in the end it is to win them over to other financial products in the future.
I don't see where vast amounts of wealth disappeared. When people got sub-prime mortgages to pay for houses that had recently doubled in price, the seller of the house actually received the cash. When the buyer walks away and leaves the bank with a house valued at only 75% more than it's worth, the seller still has the cash.
When commodities prices increased they said they were too volatile to indicate higher inflation; now that they are decreasing they claim that they indicate lower inflation?
The government is cutting rates to keep housing values high and make lending cheap. Since this is the root of the problem, how is this supposed to solve it. Homeopathy?
I've been to McD's like twice a day since I got a text message saying the game had started. I enter in every code I can get my hands on. I figure if I do that for a month I might win something... I hope. If I don't win, I'm never playing monopoly ever again. I throw away most of the food (i can't help but take a few fries and some sips of coke). The online game is starting to land on stuff I already have though and I'm racking up coke points left and right and I never even go to Foot Locker but I have like 10 of those 25% off things... guess I could get myself a few pairs of shoes.. or socks...
Good list. It reminds me of a short posting I wrote on why having a happy wife makes for a happy life. And even though it's so expensive to get her hair done, it makes her feel special. Have a look, make some comments, etc.:
Wilson, this exact thing happened to me this week when I tried to cancel a diaper order I'd made. I was trying to qualify for a $15 magazine rebate and I did it wrong, so I wanted to cancel, but it was already shipping.
The customer service agent who returned my email gave me the most surprising advice: He told me to refuse delivery of the package when it arrived, and I would get a full refund with no shipping charges. I had to call UPS and tell them the tracking number, and they are supposed to come pick it up today.
Thank you for your post. You’ve given me a sense of hope and I am able to take another look at my finances and try to get out of the hole that I am currently in.
Tim Ferris (of 4 Hour Workweek fame) has said that anyone can become an expert in a year, if they devote themself fully to that area and are smart about their approach. I tend to believe him.
Really, if you could devote yourself fully to one area (say, mountain-climbing or speaking French) with really good teachers and a chance for immersion, you'd definitely be very far along in a year.
I did see that episode (I think it was the one with the Coupon Mom on it, too.) My friend, however, was on a morning talk show quite awhile ago. They didn't even discuss her finances, just showed her grocery shopping with the kids and then had her sit with this "expert" while the expert spouted off very generic tips that may or may not have even applied to my friend.
I've heard that some of the tips on the Oprah show were getting backlash for being impractical, but I think that Coupon Mom's system is very practical, depending on the area you live in. We only have one store near us. It is over-priced, but does offer double coupons. The downside is that they won't double them for any item that is on sale. :(
I am about to come into a small inheritance, one that is getting smaller by the day (parent's retirement account). My strategy will be to live off the inheritance (which is small enough to be tax-free), while banging as much of my taxable salary as the law will allow into my company's sweet 401K plan (6% matching) during this market trough.
The article asks: How did house prices get too high?
The prices got too high for the same reason most prices go up: the demand increased.
Why did the demand increase? The demand increased because more people qualified for loans to buy a home.
Why did more people qualify for loans? The Clinton Administration felt everyone had the "right" to own a home. They made it easier for these people to qualify for loans. This is the real root cause of the problem.
Having worked in a central bank and having had the chance to talk to some of the senior economists (I'm not an economist) my perceptions changed.
The media seem to put an aura around central bankers as all knowing and powerful. I remember distinctly in the late 90's the fascination with every sentence uttered by Alan Greenspan. I can tell you quite plainly they don't deserve it. They are regular people just like you and me. They make mistakes just like you and me as well.
Let's not forget why we are in this financial mess in the first place. Excessively low interests and the general population's belief that house prices would rise forever. I can tell you there are smart economists with some of the best university degrees who bought property right at the peak.
I don't think central bankers are evil or incompetent. They all believe they are doing the right thing. The trick is to ignore the fluff in the media and focus on yourself.
Get out of debt. Build up savings. Buy assets of value and be mindful of risk.
Normally a larger money supply will lower the value of the dollar, simply through ordinary supply and demand.
However, since changing the money supply has other economic effects, there will be some circumstances when increasing the money supply makes the US a more attractive place to invest money. If that results in large numbers of foreigners wanting to buy dollars to invest in the US, it can end up pushing up the value of the dollar.
Just now the current economic crisis has made the US seem like a safer place to invest, attracting some "safe haven" flows into the US and forcing up the value of the dollar. I talk about that some in my most recent post:
http://www.wisebread.com/inflation-is-going-away-for-a-while
thanks for the links, Philip. I expect what we'll see in the future depends on who's in charge, and how far off the next bubble forms - by that time people may have forgotten the housing bubble. Or, if the recession lasts for years, people may be so happy for the upturn of a bubble that there will be too much public pressure against even a small contraction.
My unpublished short story collection just won a major prize. Yay!
Margaret Garcia-Couoh
I watched the Thriftiest Family in America episode this week and was not all that impressed with the family featured -- why was it being touted that living on $58k AFTER TAXES AND RETIREMENT CONTRIBUTIONS was a challenging thing? They didn't even live in an expensive area. They touted the amount of savings they had in their retirement accounts, but again, that money wasn't even part of their stated income.
Then again, I didn't see any problem with the advice they offered the other family -- it wasn't new to me of course, but it seemed fine.
I blog at www.shopliftingwithpermission.com.
I'm always amazed at some of the negative comments left on Wise Bread and other blogs.
I like to look at blog posts as the opinion of the blogger based on their experience. That experience may or may not be similar to mine. I've never felt that I had to agree with every blog I've ever read, but neither do I feel that I should trash a post because I disagree. Most of the time I glean some great information off of blogs.
In Life there are so many variables. In my mind even a true expert can't be right 100% of the time for every situation. Everyone on Wise Bread is doing a great job! Ignore the haters.
When I lived in Tampa several years ago there was a two weeks course offered on How to Become an Expert in Six months. When I hear/read questionable “expert” opinions, I often wonder whether they attended such a course or they truly speak from experience. Testimonials and unique, smart advice grab my attention. I always ask, “Tell me something new, something that can improve my life or entertain me”; for that reason I like reading the Wisebread website.
i have all of them except the rare ones listed above. becuz i work at mcdonalds lol
and arches is not a rare peice at all. im in colorado and i have 3.
yeah i work at mcdonalds and i have every piece except for the ones listed above and i got them in like 2 days. so there really easy to get. its a total rip off.
Philip,
I know that if the money supply is too great, the cost of things goes up, a.k.a. inflation. I recently read somewhere (and unfortunately can't remember where!!) that when the government injects money into the system, that the USD actually gains against other world currency, at least temporarily (or maybe artificially?). Can you help explain this phenomenon?
Thanks for those other posts by the way.
Ian
that so nice and true
We gave not having a TV a shot and LOVED it!
We don't have one. I highly recommend giving it a try. It saves tons of time and everyone knows that time is money!
~The Bargain Shopper lady
thanks for the post
time to get back to work on my writing
Thanks for this excellent article! I think my parents did everything on this list, except for the family vacation planning part. I cannot thank them enough, as I've been managing my finances since I was a pre-teen, and was financially independent by the time I went to college (with the help of financial aid). Now in my mid-20s, I have no debt except for student loans, I've maxed out my 401k and Roth this year, and am saving for a down payment on a house.
When I have children I am definitely raising them to be similarly financially responsible, and you've laid out the steps in a very organized fashion.
Thanks for a great Nora,
It never ceases to amaze me how with our kids things are more caught than taught!!
I do however believe that we need to find ways of teaching them about money praticularly as there is a concerted effort now to get them to live beyond their means by offereing cheap credit and bombarding them with consumer marketing material.
Even if credit dries up it will only be a short term issue because people use debt as a means of making a living i.e. banks , credit cards etc and therefore as soon as they can they will try and sell into new markets i.e. our children.
I know the four big banks in our country all try and get children to open accounts with them for the purpose of depositing money but in the end it is to win them over to other financial products in the future.
I don't see where vast amounts of wealth disappeared. When people got sub-prime mortgages to pay for houses that had recently doubled in price, the seller of the house actually received the cash. When the buyer walks away and leaves the bank with a house valued at only 75% more than it's worth, the seller still has the cash.
When commodities prices increased they said they were too volatile to indicate higher inflation; now that they are decreasing they claim that they indicate lower inflation?
The government is cutting rates to keep housing values high and make lending cheap. Since this is the root of the problem, how is this supposed to solve it. Homeopathy?
I've been to McD's like twice a day since I got a text message saying the game had started. I enter in every code I can get my hands on. I figure if I do that for a month I might win something... I hope. If I don't win, I'm never playing monopoly ever again. I throw away most of the food (i can't help but take a few fries and some sips of coke). The online game is starting to land on stuff I already have though and I'm racking up coke points left and right and I never even go to Foot Locker but I have like 10 of those 25% off things... guess I could get myself a few pairs of shoes.. or socks...
Good list. It reminds me of a short posting I wrote on why having a happy wife makes for a happy life. And even though it's so expensive to get her hair done, it makes her feel special. Have a look, make some comments, etc.:
http://www.onemillionbucks.net/2008/09/my-wifes-hair-happy-wife-happy-li...
Thanks!
Wilson, this exact thing happened to me this week when I tried to cancel a diaper order I'd made. I was trying to qualify for a $15 magazine rebate and I did it wrong, so I wanted to cancel, but it was already shipping.
The customer service agent who returned my email gave me the most surprising advice: He told me to refuse delivery of the package when it arrived, and I would get a full refund with no shipping charges. I had to call UPS and tell them the tracking number, and they are supposed to come pick it up today.
I blog at www.shopliftingwithpermission.com.
Thank you for your post. You’ve given me a sense of hope and I am able to take another look at my finances and try to get out of the hole that I am currently in.