Smart People Are Not Always Financially Savvy People

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Smart people don’t always makes the best financial decisions.  Sometimes smart people are not always financially savvy people!  I’m going to illustrate a few stories below of my personal experiences of such people that I respect that you would think are financially clever, but their past history proves otherwise.

As I’ve mentioned in the past, I use to work in the  construction industry during my college days in the summer.  It was good money and actually fun but hard work.  During many a summer, I would work with a John.  This is the guy that I mentioned previously in the article called “Frugally Saving Money By Taking Advantage of an Unusual Opportunity“, in the article I talk about how he threw a deer in the back of his truck that was roadkill, and put in in a freezer at home (after he dressed it…).  Obviously, he was clever and didn’t miss that opportunity that was presented to him.

Plastic Penny

Plastic Penny

Well, the same person had this tendency to go to lunch and have a few beers bought at at bars (along with food to of course).  I was always amazed at how much the bill would be for this (what I considered) huge expenditure for lunch.  Another splurge would be that ever year he’d by the most fancy truck around.  With each year’s truck getting nicer and nicer, to a poor college age student (me), it was mind-boggling!

Now at the same time, every time he would find change on the ground he’d pick it up!  The dichotomy of his financial behavior always had me guessing.  He was a very “fun to be around” person, but also kind of tough.  The other constructions workers would follow the same patterns and the head construction guy.  Each guying newer trucks every other year, and buying the same meals at lunch.  Now a lot of it had to do with the respect of the head guy, but it was a costly respect, at least in my option.

I thoroughly enjoyed my experiences with John the head construction guy at the construction company that I worked at!

My next story is a bit different.  She was an extremely frugal woman and did a great job of saving money, but I don’t think she understood the effects of either inflation nor the principles of compound interest.  While she would look for the best bargains at multiple stores for grocery items, she never accounted for her traveling expenses.  Instead of investing her money in mutual funds, she would hid her money at home, and I believe even under her mattress (only a few thousand under the mattress though).  Some times if you had a keen eye, you’d see the corner of a dollar bill sticking out of a hiding place.

While she was a great saver, and definitely had some money, it will never be as much as she could have had is she had invested that money in money making assets and investments.  She definitely had part of the equation down, and should have more money in the long run than John “the head construction guy”, but she will never have as much as she could have had if she made her money work harder be investing that money in safe investments.

Both individual above, while not college education are very smart people.  If you met them, it’s pretty obvious, but without understanding basic financial principle they both will never have as much as they could have had if they had a basic financial education (or read pf bloggers).

I hope you found my stories interesting, if you has any story you’d like to share in the comments, please do!

Bests,

Don

 

Financial Benefits of Having a Fuel-Efficient Car

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Are you thinking about buying a new car, or perhaps you are buying your very first car?

Well, I’m here to remind you to take into consideration the financial benefits of having a fuel-efficient family car as a viable, prudent option!  Personally, I know that in the past, I at one time would just looked at the total price tag when buying cars as the primary basis of my purchasing decisions, (much to my chagrin).  Today, a more “wiser” me, take many more variables into by buying decisions.

Today gas prices are incredible high!  In fact gas prices are so high that as a car buyer, you must take into account the financial benefits of having a fuel-efficient car versus just buying the cheapest option.  Oh sure, the fuel-efficient car will be more expensive out of the gate, but after a few years, the fuel-efficient car will usually be the winner!

Honda Accord

Honda Accord

In may ways the fuel-efficient car versus the cheaper, maybe used car is much like the race between the tortoise and the hare!  At the beginning of the race the hare (the cheaper car) is way ahead, but after a few laps and many gas station refills later, the tortoise manages to catchup and pass the hare in terms of overall financial benefit!

Now that you know that after a few years, the fuel-efficient car beats the used or gas guzzling car, let me list a few additional benefits of a fuel-efficient car!

  • More than likely, the fuel-efficient car will be newer and possible under a warranty.
  • Hopefully the new car will be much cleaner without any odd previous owner smells (did they smoke?).
  • The repairs of a newer fuel-efficient car will be minimal and in the unlikely even such a repair is necessary, it’s covered by the warranty!
  • Since the fuel-efficient car is newer, it should look nicer and be more in tune with your individual taste in car styles.
  • And let’s not forget, less trips to the gas station!  In my case (yes I’m looking for a new car), it would literally cut my gas station visits down by half.  In the winter months, this is truly a reward in and of itself!
  • And finally there is handling, comfort, looks and pride of having a new fuel-efficient car since you’ll be helping the environment in your own personal way!

In a future post, I’ll break down the math, but for now it’s worth it to note that my gas expense would be cut in half with the new fuel-efficient car for the family, when compared to my existing vehicle.

 

Bests,

Don

Are Laptops and Smart Devices Worth It?

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By now, if you read my site, you know that I’m about acquiring assets that make money!  But one grey area that I think it worth considering is electronics!  My question is:  Are laptops and smart devices money losers?

In my particular case, I own a laptop that has enabled me to do work in places that I wouldn’t have though that it would be possible!  For example, I was able to crank out a few posts at my local drive-in!  During the movie “Ice Age something”, I was able to crank out articles while the family enjoyed the movie!  Normally, that would be a waste of my time, but with my handy laptop, I was able to pretty much ignore the movie and get my work done!  Actually, my laptop has made me both a more versatile and mobile person!  I’ve written many an article at libraries, coffee shops and while being inconvenienced while waiting from something (like doctor visits).

Apple iPhone

Smart devices make it possible

I find it very refreshing that I’m productive while at these locations (especially the doctor’s office).  Time is valuable, so why waste it!

So in my case, I think my laptop has more than paid for itself, and even though it will be obsolete in a few years, I think it was definitely worth the cost!  I’m very satisfied with my purchase.

Now onto smart phones…  I currently don’t have one (other than the one provided by work), but they are probably similar to my laptop.  In fact, I’m positive that I would use my phone for tweeting and other forms of socialization!  That said, I sure I wouldn’t be able to do the in-depth type of work I can do with my laptop, so I’m not 100% sure that a cell phone would be worth the costs (especially the monthly charge).  One could make the case that it would be cheaper to buy a smart device and use a wireless router for talking at home or common hot points.  Then buy a cheap phone for actually talking (or IMing).

Another problem about smart phones is that the technology is obsolete much more quickly than my laptop.  It seems like smart phones have a life span of about 1.5 years, and they cost as much as my laptop!  Still I see that they can have value, but not near as much as my laptop does!

Do you think that my justification is flawed?  Are they making you money or wasting your time?

Bests,

Don

 

 

Using the Right Tool For The Job

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Having the Right Tool For The Job

I don’t consider myself a wimpy man by any means, but last summer what I was working to replace the rotor on my front braking system, I couldn’t for the life of me, get a nut off.  Now matter how hard I pulled or pushed or how many of the tricks I tried, the nut wouldn’t budge!  At one point in desperation I even took a hammer and was taping the wrench handle with it, trying to get the nut to loosen.  I know this was a dumb move, but I tried it anyway, realizing that there might be the possibility that the screw that the nut was on might break.  Still it wouldn’t budge!  This is when I learned that instead of “brute forcing” a problem, to instead use the right tool for the job to make the task quicker and easier!

Finally, I was telling a friend at work and he said why not just go to Autozone and borrow a breaker bar?  A breaker bar is a swiveling socket attached to handle the length of a small broom!  Sure enough, I borrowed that (Autozone has a great policy about such things), and with just a bit of pressure applied, sure enough the nut twisted off like it was taken off the day before (which obviously it wasn’t, lol).

breaker bar

My experience ended well, but such is not always the case!  I was luck to have a friend with a great suggestion about I tool I forgot about and never used previously.  But back when I worked for a construction company, I saw something that task that ended up being an expensive operation for another construction company.

You see there were two building that were fairly close to one another and something between them needed dug out to be fixed or replaced.  While I was working with the construction company that I was working for at the time, I noticed a few guy daily going into this narrow strip and digging and wheelbarrowing out loads after loads of dirt.  It look like a hard process and they were still working on it the construction job we were working on was finished.  I remember thinking there must be an easier, quicker way of going that task.  Later, I was looking through a magazine and came across something called mini excavators.

mini excavator

mini excavator

 

These handy little machines would have been perfect for the task that I saw the other company’s construction men working at.  I think if it were me, I would have rented one of those bad boy mini excavators and did the job in 1 day with just 1 guy doing the job (or maybe two days at the max).

Now I understand that planning and a little bit of research can you find the tools to make a job smoother, better looking, and less labor intensive!

I guess my stories could be summarized as “look before you leap”, meaning get the right tool for the job before you start the job!

Best,

Don