Monday, April 20, 2015

Dunning-Kruger and Other People's Money

Dunning-Kruger and Other People's Money
When it comes to other people's problems (O.P.P.), I'm always an expert. When a friend is flummoxed over a new job offer, and whether he should stay put or jump ship, I can give cogent advice on the spot. Unsure how to deal with a family issue? Ask away. I've got you covered. And when it comes to money, it's a whole 'nother ballgame. Despite having no formal training or certifications whatsoever, I'm happy to opine on all sorts of financial matters. With anyone. Strangers, even. At length.

Why should I be so confident when helping with other people's problems? For one, because we all are pretty confident in those situations. It's always easier to see the clear answer to someone else's problems. They can't see the forest for the trees, but we can. They're working under a variety of biases, and often don't realize it. But we, their trusted friends and advisors, see them clearly and can guide them to an optimal solution.

Monday, April 6, 2015

Middle Class Wealth

Middle Class Wealth
Last week we took a peek at income quintiles for American households: if you lined up each American household from richest to poorest, and broke them into fifths. The results were fairly shocking for me. The main lesson? We could really benefit from earning more. Sixty percent of U.S. households are making less than $66k per year. Luckily, a lot of Done by Forty readers are doing better. Let's take a look at the poll results:

Sunday, March 29, 2015

Middle Class? How about Middle Quintile?

middle class, income quintiles, middle class definition
The great thing about America is that just about all of us are middle class. We all make enough money, send our children off each morning to learn in good school districts, and have appropriately attractive significant others. We are a nation living on the shores of Lake Wobegone. It's true: you can ask anyone. 85% of people in a recent Pew Research Center poll claimed they were "lower middle class", "middle class", or "upper middle class". When five out of six of us are in a middle class, that, folks, is economic prosperity.

The best things about these designations is that there are five of them: lower class, lower middle class, middle class, upper middle class, and upper class. Quintile opportunity!

Monday, March 23, 2015

This Year is Not Average

Confession time. I had never calculated my annual spending before, until 2014. Which is weird, since I've tracked my monthly spending and savings for years. The prior years' data is still hanging out in old tabs of my budget spreadsheet, just waiting to be aggregated and put into nicely crafted formulas. But to pull all those individual spreadsheet tabs together, with all the organizing and copying and pasting...ain't nobody got time for that.

But then I remembered that I was trying to retire in about six years. Might my annual spending figure be important to figure out before then?

No one ever claimed that I knew what I was doing with money.

Monday, March 9, 2015

You Down with ESPP?

You Down with ESPP?
First world problem alert: we have an investment decision to make, and one with tax consequences, too. (Remember back when we used to have to choose between paying rent on time or paying our credit card bills before the late fee kicked in? Those were the days. It's like Kevin Spacey said back in American Beauty. All I did was party and get laid. )

So, my employer generously allows us worker bees to participate in an employee stock purchase plan. Basically, it allows employees to pay into a program, and to buy the company stock at a discount.

Here are the details:

Monday, March 2, 2015

The Full Cost

There are negative externalities in our marketplace. Things that have a hidden-but-real cost, which aren't fully factored into the price of the items we buy. The environmental damage caused by shipping all the stuff we love from Amazon isn't exactly factored into the low, low price. I, as the purchaser, do ultimately pay for the raw materials, the labor for creating the goods, the customs, the insurance, the companies' profit, and the bill from the shipper itself. But the long-term costs from the pollution spewed out of gigantic freighters carrying the containers overseas, or that of the diesel and UPS trucks bringing it right to my door, a whole bunch of people end up paying for that...with their lungs.

Monday, February 16, 2015

Central Europe Travel Hack

Central Europe Travel Hack
This May, Mrs. Done by Forty and I will be traveling to central Europe with our close couple friends. We'd all gone to Hawaii a couple years ago and had a fantastic time so, we figured, let's try it again. We'll visit five cities over sixteen days: Vienna, Bratislava, Budapest, Krakow, and Prague. It is hard to express how excited I am about it. And thanks to Brad over at Richmond Savers, we'll be traveling with some (nearly) free flights and hotels, too.