Author Archives: Money Reasons

About Money Reasons

A offbeat personal finance blogger that comes from the tech world.

Frugal Weight Loss Update 220

by

Great news today!

I weighted myself and I’m down 30 lbs from where I started (March 15th, 2012)!

What is my secret? Did I spend a lot of money or do some incredibly intense workout program?

No, all I did switch to a low carb diet and spend up to 10 minutes every other morning doing a light exercise routine of a set or two (depending on how late I’m running on getting to work) of pushups and situps.  My exercise routine is so light that I hesitated in calling it exercise!

Did I spend a lot of money since my diet is more protein based?

No, Eggs was a primary stable and they are incredible cheap. Eating eggs for breakfast enabled me to reduce my breakfast cost by at least 75% versus the way I use to eat. Lunch and dinner was more expensive though, so it was a wash with respect to the cost overall.

Do I miss desserts and other carbs?

Yes, but I deviate from a totally low carb diet by occasionally getting dessert when we go out to eats on the weekends and sometimes I’ll even eat a slice of bread at those restaurants, on the weekend during the same sitting.  For the dessert, I split it with a family member and actually, it’s really their dessert and I’m just eating a third of it.  After I get down to my target weight range, I’ll continue to increase my carb intake, making sure that I continue to eat healthy.  By healthy, I mean skipping the pre-process sugars and flours found in too many sweet snacks these days!

What is my goal at this new weight?

Not much really, just to stay the course.  After I lose another 10 pounds, I’m planning on introducing a light weight workout routine.  Such a weight lifting program will be more for vanity than health though.  Although there is some bone density benefits in doing so, and possible a delay of aging (or so I’ve read).  Personally, I just like looking good when I workout with weight and also it might be a good model for my son and daughter to follow.

Bests,

MR

Real Estate – First Missed Opportunity

by

I found a duplex that I wanted to buy, but my inexperience caused me to miss this diamond in the rough!

The duplex that I wanted and pursued was what appeared to be the perfect starter rental property for an individual that wanted the “cash flow” from such an real estate investment.  It was small and appeared to be easy to fix.  Newer, but not so new that it would be expensive.  In a city that while on the small side, still had few duplexes available for renters.  And the last benefit was that it didn’t have central air, instead it had two air conditioner units in the front with the holes neatly cut into the wall of each unit.  Each unit has two bedrooms and 1 bathroom, nice and simple.

Yes, it’s not sexy, but it’s also not a total dog either.  It would have been perfect starter and learning home to own for me!

So what happened?

  1. I went on vacation for a week shortly after the house went up for sale.
  2. I didn’t contact the real estate agent, instead I opted to try to establish a relationship with a bank so I could get pre-approved.  Surprisingly, even though I have no debt and a credit score over 800, I’m having problems getting responses from the bank that I contacted for the pre-approval.
  3. I didn’t jump on this deal.  After driving down to check it out, and realizing it was a great piece of property, I second guessed my opinion.  Instead I looked for reasons that it might not be a good deal.  Even though I was dragging my feet, I couldn’t really come up with a reason not to buy the property.

I’m sure if I were more experienced, I would have been able to move with speed.  Too bad, it looked like a great start property…

Sad miss,

MR

Reasons for a Non-working Allowance for Kids

by

I admit, I’m somewhat unique in my implementation of the allowance plan that I provide for my kids.  You see, they get an Allowance only to learn how to manage money.  They don’t have to perform any work to collect their allowances, and that makes me an odd duck in the eyes of many of my peers.

Recently, while on vacation in Myrtle Beach, one of my wife’s friends started asking me about my approach to Allowances, with a reprimanding tone in her voice (apparently my wife told her of my Allowance policy and obviously she didn’t approve).

Cash in Hand

Cash in Hand

Instead of wanting to debate with her on the merits of my Allowance plan, I decided to verbally identify the past performance and the associated benefits that my kids have accomplished with their money management skills gained through getting such an Allowance policy.

  1. First, my son (on his own mind you) created a journal entry system that tracks his amount that he is saving and the amount that he has for spending.  The far exceeded what I had taught him, and to be quite honest, I was somewhat floored by his idea for managing his money.  If you were to look at his notebook, it’s literally looks like a checkbook journal minus the date field and column headings.
  2. My kids no longer ask for toys at the store because they know that they will be paying for it with their money from their allowance.  It’s amazing how they don’t even look at the junk anymore and instead focus on those few items that they find the most joy from.  Lego’s for my son and Build-A-Bear stuffed toys for my daughter.
  3. They actually get excited and proud when we deposit the money that they have saved into the bank, in some ways it’s like a game.  Since my daughter is still young (she’s 8 now), she still has envelopes for the money to be split between area such as savings and spending…
  4. To make extra money, we still offer to pay them for work they want to pick up to make extra money around the house.  So while they are learning money management skills from the allowance, they also are learning the value of a dollar.  You’re probably wondering why I do this?  Well, I don’t want them to associate money necessarily with hard (especially manual) work.  I don’t want them to think of money as trading their labor and time for.  Money is more than just hard (manual) work it’s a medium for exchanging things of value!
  5. Incredible math skills.  Both of my kids score very high in math related topics in school.  I attribute part of their fascination and superior performance with math in school, from their real life experience of managing their money.  Math is no longer an abstract principle to know, instead it has a basis in reality that I think sharpens their focus on the topic.

While my son (who is almost 12), has made the most progress, my daughter is coming along nicely too.  I’m impressed that already she doesn’t want to just spend and spend, like money is a forever resource.

After identifying the history of my plan my wife’s friend didn’t really debate me at all, and said “It sounds like they’re going a great job”.  I was surprised and a bit happy with this response.

So while my approach around an Allowance might not work for every kid, it seems to be a perfect instrument in learning for my kids!

Bests,

MR

Victory With REITs?

by

These past three almost four years, I’ve been investing in REITS (Real Estate Investment Trusts) and so far I’m been very happy with them, and here’s why…

I’ve almost recaptured my principal that I invested in the REITs!  If all goes well, sometime in the 2 years, I’m have doubled my money!  Now if you look at my investment in the REITs, it’s not impressive… For example, the $10,000 I have invested in my largest REIT position and it’s stock value is only up to $10,044 not very impressive huh, but after you factor in the dividend stream that I also received, my gain is really almost 75% of my initial $10,000 purchase price!  About a 175% in 3.5 year, not too shabby huh!  I guess that’s what a near 20% dividend can do for you over a few years span of time!

While I’m not really bragging, it has been nice!  Most people (including myself) thought that I was gambling, and to a certain extent, they were right.  If the Fed (Mr. Ben Bernanke) decided to raise interest rates, I would have possible been hurting, at least a bit…  But based on the economy and more importantly the world economy, I found that scenario unlikely!

If Mr. Ben Bernanke (aka the Fed) keeps rates flat, I don’t see why I wouldn’t be able to double my money allowing me to recoup my initial investment dollars.  At that point, I might just let it stay invested in the REIT since it’s now considered the “the house’s money” (a gambling saying that means I’m playing with the casino’s money since I have all of my principle back).  Since I doubt that the REITs that I’m invested in will go to zero, I’ll just let them ride and not worry about it.

Now the big question is “Would I invest in REITs today?”.  And my answer would be it depends, but maybe for the next 1/2 year to 1 year.  It really depends on the Fed (Mr. Bernanke) and what they are planning to do with the interest rates.  As long as REITS can afford to pay out a decent dividend, it seems like a decent, although much more risky gamble.

While I consider the dividend income from the REIT’s that I’m in a victory, I’m not recommend the same approach as a strategy today…

Cheers,

MR

 

Disclosure: I have REITs and I’m currently long on them!