Adam Baker of the site Man vs Debt showed me another spin on the paying down of debt in his “Debt Tsunami: The Ultimate Method For Paying Off Debt.” I’ve made a point that paying debt highest rate first was surely the fastest way to get out of debt altogether, and been critical of Dave Ramsey’s Debt Snowball for its method of paying low balance to high. Adam takes a look at “a loan from the inlaws” and how paying it back would reduce tension between the husband and wife, making them both feel better. So while Adam admits the high interest payment first method may be the logical choice, it can easily fail to be the better one. I’m open to new approaches, and appreciate his fresh view on what for me was an old topic where I was digging my heals in.
A number of blogs have posted on the credit card reform act, including Bargaineering, Five Cent Nickel, and Tough Money Love. I’m editing my own commentary on this legislation, to post early this coming week. It’s not a black and white issue, that’s all I’ll say on that right now.
Next, I read a year old post by Trent in The Simple Dollar titled, “Frugality and the Impression of Poverty.” An interesting take on the social pressures that may prevent us from doing some of the frugal things we’d otherwise do. This post flows nicely into the more recent, “Accused of Being a Cheapskate,” a post that digs in a bit on the the topic of frugality and the negative connotations that sometimes follow.
Last, I’d like to share an image I came across on a Japanese recipe site.
I can’t put any more words to this. The image speaks for itself.
Joe
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I’ll sleep on this a bit and offer my thoughts this coming week. Enjoy the weekend.
Joe
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“Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
This quote is from Charles Dickens’ novel David Copperfield, change it to dollars and add a few zeros and the observation is still valid 150 years later. It’s also the quote I’ll use to kick off this new series of thoughts with an eye toward getting one’s finances in order and finding ways to save.
Having no idea how to budget when I first tried to get my spending under control, a few years out of college, I decided to start by writing down every penny I spent. A few weeks really doesn’t do it, as spending changes with each season (lawn care in the summer, snow plowing, etc. in the winter.) I suggest a full year, although for the major items you can probably gather information from old credit card bills along with your check register.
Even after a few weeks, you’ll get a good idea on where you are spending, and where you might start to save. More on this next week.
Joe
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I mean Steve Schwartzman, the CEO of the Blackstone group. Somehow the story of his 60th birthday bash has made it to the media’s attention again. Me, I missed it the first time. The $3 million bash took place in February, 2007, before the Blackstone IPO, while it was still privately held. I find the mix of outrage and/or sarcasm to be misguided. This was not another Dennis Kozlowski, not a CEO raiding the company’s coffers.
I have the opposite view of the critics, I think every person with million dollar plus income should spend, and start tomorrow. Consider, that $3 million was money spent somewhere. Chefs cooking the food, busboys cleaning up, security people, etc. Would we be better off if he kept the money in the bank?
When this crisis first started, and I read blogs suggesting that we all save, save all we can, I remarked that such advice would surely lead to a worsening recession if not a depression. We spent too many years with a saving rate near zero, and flipping the switch to a 5% or higher saving level would have a drastic impact to GDP. I don’t kid myself that we can party our way out of this recession, but I know the spending needs to start somewhere and given the choice between 30,000 couples dropping $100 on a nice dinner, or one guy throwing a bash, I think it’s no choice at all, we need both, just not on credit. That’s part of how we got here in the first place.
Joe
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It seems that Donald Trump has launched a lawsuit against a writer who suggested that Trump’s net worth is merely $150-$250 million. According to Trump, this amounts to slander, the claim, malicious, and hurt Trump’s business.
Funny, in a Wall Street Journal article yesterday, Trump is quoted as saying that despite a 30% limited partnership interest in a particular West Side (Manhattan) project, he “felt” like he had 50% of the project and publicly stated that was his share.
No wonder there are 5000 Google hits for [“Donald Trump” blowhard]. Of course, the Donald would say that anyone who speaks ill of him is envious. Fortunately, there are dozens of people far more well off than him whom I respect, Bill Gates, Warren Buffet, Steve Forbes among them. An article by Smoking Gun reports that after 9/11, even the Queen of Mean, Leona Helmsley, donated $5 million to 9/11 related charities compared to Trumps $0. But I’m sure he felt like he made a nice donation.
Joe
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