This post may not be quite what you are thinking, but is in fact a literal answer to the question, "Who gives?" A study completed by George Barna's Research Organization found that only 5% of Americans regularly give 10% or more of their money to a church or charitable organization. Among many of the sectors and subsets of their study, those who label themselves as "conservatives" found themselves in the top 5 most generous subgroups. Self-proclaimed "liberals" also found themselves in the top 5.... the top 5 least generous subgroups. The explanation for this result is simple. Conservatives are firm believers in self-responsibility, whereas, liberals are firm believers in social-responsibility. Therefore, conservatives are more likely to believe that they are personally responsible to give to churches/charities, so they do. Whereas, liberals are more likely to believe the responsibility falls to society. So, if you are down on your luck and need a handout, you are much better off hanging out around the Republican headquarters. (Registered Republicans were also on the Top 5 list of most generous subgroups.) You be the judge.
Liberals vs. Conservatives- "Who Gives?"
This post may not be quite what you are thinking, but is in fact a literal answer to the question, "Who gives?" A study completed by George Barna's Research Organization found that only 5% of Americans regularly give 10% or more of their money to a church or charitable organization. Among many of the sectors and subsets of their study, those who label themselves as "conservatives" found themselves in the top 5 most generous subgroups. Self-proclaimed "liberals" also found themselves in the top 5.... the top 5 least generous subgroups. The explanation for this result is simple. Conservatives are firm believers in self-responsibility, whereas, liberals are firm believers in social-responsibility. Therefore, conservatives are more likely to believe that they are personally responsible to give to churches/charities, so they do. Whereas, liberals are more likely to believe the responsibility falls to society. So, if you are down on your luck and need a handout, you are much better off hanging out around the Republican headquarters. (Registered Republicans were also on the Top 5 list of most generous subgroups.) You be the judge.
Simple Cents University: Investing in Gold?
If you have watched the news recently, you have certainly been made aware that within the next 12 days the world will end and the entire U.S. Economy will be shattered like Michael Jackson's hopes of a "comeback." (scary pic, sorry.) 
But, if you have a decent memory, you can remember the last 27 times the world ended and the US Economy shattered. As certainly as all major news corporations boost drama to improve ratings, those selling gold (investments) are quickly put into the spotlight whenever we face "economic downturns." Investing in gold can be, but rarely is, a profitable venture. For example, from 2002-2004 an investor in gold could have realized a 10+% return on investment (Better than the stock market over the same period.) This is due to the fact that during economic uncertainty (like post- 9/11), people always flock to gold. The rationale for this is actually quite ludicrous (a separate post all together), but either way, it still happens. So if you want to try to "time" these occasional spikes in the price of gold, that's fine, just know what you are doing...gambling..speculating. Over the long-term gold is a horrible investment, barely outperforming inflation. In many "sector" reviews it ranks dead last as an investment category. And to make matters worse, it usually ranks at the top of the risk chart. So there you have it. It is extremely risky, and not very profitable. Stay away from it. IF you want to take a few bucks (less than 5% of your total investments) and gamble with gold...fine...but nothing more than that.Usually, the "gold rush" phenomenom describe above has similar results to the infamous San Francisco Gold Rush of 1849. Most miners made little to no money...but the people selling lots/tools/equipment/permits made a killing. Sounds familiar?!?
Simple Saving: Yardsales and Big Business
Ok, I am NOT suggesting you go to a yard sale to save money. (Though you could do that.) I am suggesting something much larger that will pay high dividends if you take it to heart. One skill valuable to "Big Business" is the ability to negotiate. This skill can be quite profitable for companies for sure, but we are only interested in the individual.
Everyone has a "friend" that seems to get a "deal" on everything he purchases. He got his plasma 200 bucks cheaper than anyone else...the deal he got on his car...you should hear how much he paid for... On and on. It can make us retail shoppers nauseous. Actually, your friend is not lucky, he is a good negotiator. You would be amazed at the deals you can find (yes, retail, brand new items) if you are willing to negotiate (or fight) for them. Naturally, we are all pretty pathetic when it comes to this skill. But like most things, it comes with practice. So take 20 bucks (singles and fives) and go to a yard sale. Try to get something for half price or better. The reason this practice is so effective is because you actually could care less if you get the 20 year old tasseled lamp for 3 bucks or not. You will walk away from some sales empty handed. But then you learn the power of the "walk-away." You will be amazed at how 20 dollars of working on this skill at yard sales can equate to 200 bucks off a TV at best buy, or 4000 bucks off your next car. Try it out. It is actually pretty fun as well.
Financial Literacy
Here is one for ya...
I am writing a post, about a post, about a post. Follow me here:
Annamaria Lusardi is an econ professor at Dartmouth. Ms. Lusardi is fighting the good fight against financial illiteracy. Through research, academia, & the Dartmouth clout, she is bringing awareness to financial illiteracy with a passion. I solute her, for her efforts. Of course, simplecents.org is right behind her. In a recent post Ms. Lusardi proposed a three question test, to gauge your financial literacy. The questions are as follows:
Stephen Dubner is the coauthor of a fabulous book entitled, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
. The book is fantastic. That's why it has made the highly coveted, "Simple's Recommended Reading" list. I know, its impressive - but I digress.
On the Freakonomics blog, Stephen wrote some interesting commentary on Lusardi's work. Keep in mind that Dubner is the author of a New York Times bestseller.
I am writing a post, about a post, about a post. Follow me here:
Annamaria Lusardi is an econ professor at Dartmouth. Ms. Lusardi is fighting the good fight against financial illiteracy. Through research, academia, & the Dartmouth clout, she is bringing awareness to financial illiteracy with a passion. I solute her, for her efforts. Of course, simplecents.org is right behind her. In a recent post Ms. Lusardi proposed a three question test, to gauge your financial literacy. The questions are as follows:
1) Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?Because the battle against financial literacy is most notably present in the lives of the 50+ crowd, much of Lusardi's research has been geared toward the baby boomer generation. Lusardi has found that of people 50+ in age, only 50% of those surveyed responded correctly to the first two questions. Of the same respondents, only 1/3 of those surveyed corrected answered all three questions. This is astounding.
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
2) Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, would you be able to buy more than, exactly the same as, or less than today with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
3) Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
c) Do not know
Stephen Dubner is the coauthor of a fabulous book entitled, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
. The book is fantastic. That's why it has made the highly coveted, "Simple's Recommended Reading" list. I know, its impressive - but I digress.On the Freakonomics blog, Stephen wrote some interesting commentary on Lusardi's work. Keep in mind that Dubner is the author of a New York Times bestseller.
Oh, by the way, here are the answers to the test:I’d like to think I’m at least adequate in taking care of my family’s finances and everything that includes in the modern world: real-estate and insurance decisions, saving for college and retirement, investing and tax planning, etc. But it has been a bit of trial-by-error mixed with trial-by-fire — and to be honest, I was very fortunate to have an older brother who is smart, frugal, patient, and who worked for many years in finance. If it weren’t for him, I’d be in considerably sadder shape.
But here’s my point: I’m not exactly undereducated. I had 13 years of public schooling, 4 years of college, and another 2 years of graduate school — and after all that schooling, I don’t know if I learned enough to answer all three of Lusardi’s questions correctly. The subjects simply didn’t come up. Just as they apparently didn’t for the two-thirds of the older respondents to Lusardi’s questions.
1. a) More than $102
2. c) Less than today
3. b) False
Simple Wisdom: Finance & Marriage
A few years ago, an area business man with a sizable net worth was asked, "If you could give one piece of financial advice, what would it be?" The inquirer's mind raced from stock tips, investment strategies, to career advice. The business man's answer was simple,
The advice was profound on a number of fronts:
First, financially. A broken marriage breaks financial traction. Compounding interest is not realized when dividing by two. It's one step forward, and twelve steps back.
Second, emotionally. A broken marriage is not only a financial kick in the pants, but a big emotional sucker punch right to the throat. Often times the stirred emotions drain the parties involved of financial energy & focus. A financial plan is interrupted and no energy remains to regroup.
Last, relationally. Money is not a solo act. It is very relational. Family members, friends, & colleges are all an integral part of your financial success. They provide influence, accountability, advice, & support. Your response to a relational breakdown with your spouse will often times carry over to your other relationships. Thus influencing their roles in your financial life.
"Marry only once."
The advice was profound on a number of fronts:
First, financially. A broken marriage breaks financial traction. Compounding interest is not realized when dividing by two. It's one step forward, and twelve steps back.
Second, emotionally. A broken marriage is not only a financial kick in the pants, but a big emotional sucker punch right to the throat. Often times the stirred emotions drain the parties involved of financial energy & focus. A financial plan is interrupted and no energy remains to regroup.
Last, relationally. Money is not a solo act. It is very relational. Family members, friends, & colleges are all an integral part of your financial success. They provide influence, accountability, advice, & support. Your response to a relational breakdown with your spouse will often times carry over to your other relationships. Thus influencing their roles in your financial life.
Simple Cents University: Who's Upside-Down?
Being Upside-Down is Only Fun on a Rollercoaster!You don't want to be found "upsidedown" unless you are spending a day at Six Flags (which I would recommend, and if you do go, you can usually get a coupon/deal off their website.) Anyway, being "upside-down" is a term meaning that you owe more on an item than it is worth (at market value.) For example, you finance your vehicle and owe $16,000 on a car that you could only sell for $14,000. In this situation you would be $2,000 upside-down.
The ability to get upsidedown is the most dangerous aspect of "secured" debt. [Secured debt means there is something standing for the money owed; a car, house, boat, plasma TV.] The financially minded person will NEVER borrow themselves into a situation where they will be upsidedown. It is an awful financial position. Debt incurs a certain amount of risk, which can be minimized with an asset that can be sold in a "worst case scenario," thereby eliminating the debt. For example, you can sell your house and pay off the mortgage. If you are upsidedown you sell the item and still owe money. To avoid this position, a person should NEVER FINANCE AN ITEM THAT GOES DOWN IN VALUE (car, boat, ATV, pretty much any consumer good.) and NEVER BORROW MORE MONEY ON YOUR HOUSE THAN IT IS WORTH (No second mortgages, Home Equity Line of Credit, etc.) If you do these things you will always be able to liquidate your debt and escape "a pinch."
Simple Saving: "Orange Mocha Frappachino!!!!" - Zoolander
Ok, I think we all remember the scene...if you don't, you need to watch it on YouTube. Funny movie, I think it won an oscar?!?
But seriously, here is your savings tip for today. Next time you go to starbucks. Do yourself and your money a favor and order...coffee. You heard me right. Add some cream and sugar, and you have the same drink (more or less....I don't want to hear it coffee snobs.) Seriously though, let's say you go once or twice a week and get your standard, "Orange Mocha Frappachino." That'll run up to $30 a month/$360 a year...on Frappachinos! Throw a few muffins and a date in the mix (as if anyone who orders an orange mocha frappachino deserves a date) and you are pushing 500 bucks a year. I know some of you will never consider abandoning your "sweet concoction" but it is worth pulling out the old calculator and thinking about it as you sip on your "soy double shot hazelnut carmel half caf latte."
Simple Cents University: The Budget
That's right, I said it. Budget. I'll say it again. Budget. A word that strikes fear in the hearts of so many. Budget!! Here's the thing about budgeting, everyone has to do it. It doesn't matter how much water you have, if your cup has a hole in it, you'll die of thirst.
In my humble opinion, I believe there are three reasons why we resist subjecting ourselves to a budget. First, there is the fear factor. We are innately scared of taking responsibility of our actions. We just don't like the accountability. If we bury our head in the sand, then there won't be a problem. Right...
Secondly, for alot of folks, submitting your finances to a budget is admitting inadequacy. It's saying, out loud, I don't make enough money to satisfy my every urge. I can't buy everything I want. I am not Bill Gates.
Lastly, we live in a media driven world of extravagance. Lifestyles of the rich & famous. The bigger the better. Mo' money. Gold Teeth. I haven't seen anyone on TV wiping their butt with dollar bills yet, but it is coming. This I assure you. In alot of ways, a budget symbolizes modesty. It symbolizes planning, restraint, and discipline. Those things just aren't cool. But here in the real world, you must practice restraint. If you desire a peaceful lifestyle, with a spouse that believes in you, with kids that respect you, and with an employer that trusts you, you must have those characteristics. No one makes enough money to live like Jay-Z, Donald Trump, or Brad Pitt. Give it 10 years. They will all be broke and in rehab. Trust me...or ask Latrell Sprewell, Ed McMahon, & Evander Holyfield. But as for the rest of us. We have to budget. If you have never budgeted before, try it.
You only make so much money. If you spend less than that, you save money. If you spend more than that, you go into debt. And if you don't know where you stand, you are probably blowing more money than you realize.
There is no magic to the budget. At the first of the month take a piece of paper, put your monthly income on the top of the page, and list your planned expenses below. Spend the money you will have on paper. When you run out of money, you are done. As the month goes along, only spend what you have planned. If you run over on gas (for example), that is perfectly fine. But an overage on gas means an underage in another category. Because, after all, you only make so much money.
Budgeting can be done on paper, in excel, or through a host of software programs. I would recommend Mint. I use it and love it. It is free and very intuitive. As a company, they assign to three principles of personal finance:
Spend less than you earn- Make the money you have work for you
- Be prepared for the unexpected
Sweet and simple. I like it. Mint has plenty of features. It monitors your credit cards, bank accounts, and investments. Mint allows you to set target budget goals for every category and provides an overview of those goals throughout the month. If you are a tech-savvy youngster starting up a budget, I highly recommend it.
All things aside, we challenge you to get on a budget - no matter what your income is. Live below your means and make your money go further.
Budget!!!
Uncle Sam, Uncle Sam
Today, I was letting my 2 year old son ride on the "car/truck/winnie the pooh knock-off honey wagon" outside of the grocercy store. You all know what I am talking about. As I was sitting there I noticed a label attached to the side. It was, I kid you not- A registration tag!! The generick winnie the pooh 25 cent car ride had up to date registration! Registered with who? you may ask? Labeled as Follows:
STATE OF TENNESSEE: Coin Operated Amusement Tax. Lic. # 190368470. Expires...
It would appear that the nickel and dime rides at the grocery store create enough revenue to pass a "coin operated amusement tax." I love Tennessee, but everyone must remember when we vote for politicians who promise the world it comes with a price. Every promise must be funded. Then, we end up with a Coin Operated Amusement Tax.
What is Your Favorite Cheap Date Idea?
After posting on some good cheap date ideas, we want to know...what is your favorite cheap date? It may be something from the list, or maybe you have a better idea. Let us know what you & your significant other do for cheap fun.
Just comment to this post with your cheap date ideas.
Just comment to this post with your cheap date ideas.
Simple Saving: Cheap Dates
Dates are expensive. For many of us, the days of dining for one are just a memory. Movies, ice cream, & (god-forbid) the mall are arch nemesis of the dating budget. However, Promotionalcodes.org.uk (random, i know) gives us "30 Creative Date Ideas that Don't Cost a Lot of Money". Here are some thoughts:
Although this sounds fantastic, I suspect the microbrewery tour would be a hard sell. I have toured the Mayfield Dairy before. It was nerdy adventure, but rather fun and cheap. Oh, and we got free ice cream at the end.
Parks and house hunting are two ideas that I often utilize. Also, board game nights provide alot of cheap entertainment. Especially if you host gathering, your guests will (hopefully) offer to bring the snacks and you are home free.
Flea markets and yard sales are always an adventure. With the interesting people and interesting purchases, it can be very entertaining.
People watching is my all-time favorite. Even a dreadful shopping trip can be fun when you mix in a little people watching. But beware of the ridiculous middle school mall rats...
1. Free factory tours (Free Beer). There are all types of different factories that offer free or very low-cost tours of their premises. Microbreweries are great for this, they are educational and you often get free beer samples, and who can say no to free beer? If free beer is not your thing there are also factory tours for places ranging from chocolate shops to piano makers.
Although this sounds fantastic, I suspect the microbrewery tour would be a hard sell. I have toured the Mayfield Dairy before. It was nerdy adventure, but rather fun and cheap. Oh, and we got free ice cream at the end.
Parks and house hunting are two ideas that I often utilize. Also, board game nights provide alot of cheap entertainment. Especially if you host gathering, your guests will (hopefully) offer to bring the snacks and you are home free.
17. Flea markets, swap meets and yard sales. Shopping is a lot more fun when you do it with someone else and it’s better when you do it on the cheap. Go browsing through other people’s junk and see if there are any low-cost treasures to be found.
Flea markets and yard sales are always an adventure. With the interesting people and interesting purchases, it can be very entertaining.
29. People watch. Go to an airport, a mall or a public square and sit down together to watch the people. Make up stories about who they are and where they’re going.
People watching is my all-time favorite. Even a dreadful shopping trip can be fun when you mix in a little people watching. But beware of the ridiculous middle school mall rats...
"I Feel Good!" - James Brown
Apparently, James Brown doubles as a pyschologist/financial advisor. "Feelings" seem to be all that matter in America anymore. Consider the following article on THE WALL STREET JOURNAL (online):
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July 7, 2008, 12:11 pm
Splurging Is Good for Your Health
Buying overpriced indulgences may feel good in the short term, but you pay the price later. Or at least that’s the conventional wisdom.
But a study by a couple of business-school professors says splurging now makes you happier later. Even more surprising: Not splurging now gives you pangs of regret later.
Anat Keinan, an assistant professor at Harvard Business School, and Ran Kivetz, a professor of marketing at Columbia Business School, make their case for the vice lifestyle in an article in the Harvard Business Review.
One of their studies polled college students and alumni on the subject of spring breaks. Regret about not having spent more money or traveling during breaks increased with time, whereas regret about not having worked, studied, or saved money during breaks decreased with time.
The authors write: “We saw a similar pattern in a study of how businesspeople perceived past choices between work and pleasure. Over time, those who had indulged felt less and less guilty about their choices, whereas those who had been dutiful experienced a growing sense of having missed out on the pleasures of life.” (As the old saying goes, nobody dies saying “I wish I’d spent more time at the office.”)
The authors also did a study of mall shoppers, asking about their regret about buying an expensive item of clothing. Those who anticipated short-term regret bought less-expensive items, while those who anticipated long-term regret splurged. “Thinking about short-term regret drives consumers to be virtuous, while thinking about long-term regret leads them to be extravagant,” the authors write.
Luxury-goods makers, of course, will eat this up. I can see the slogan now: “Luxury: It’s Good for Life.” Or “Cartier: You’ll be sorry you didn’t.” Whether luxury is good for your finances is another matter. (Nobody goes bankrupt saying “I wish I’d spent more on Gucci bags).
Wealth Report readers, what do you think? Do the long-term benefits of indulgence outweigh the short-term risks of regret?
http://blogs.wsj.com/wealth/2008/07/07/splurging-is-good-for-your-health/trackback/
------------------------------------------
It appears that being "virtuous" and thinking about the effects of your behavior pales in comparison to the regret you may feel when approaching a mid-life crisis and grasping for distant memories. So go ahead, be "extravagant" and "indulge," after all its better for your health! Don't think about the future or the effects of your behavior, that is so nineteenth century. Absurd.
Well, I think I am going to chance it and make responsible decisions anyway. But don't worry, I am also setting aside some extra money to fund the days I will most definately spend in a mental institution for being so "virtuous."
-----------------------------------------------
July 7, 2008, 12:11 pm
Splurging Is Good for Your Health
Buying overpriced indulgences may feel good in the short term, but you pay the price later. Or at least that’s the conventional wisdom.
But a study by a couple of business-school professors says splurging now makes you happier later. Even more surprising: Not splurging now gives you pangs of regret later.
Anat Keinan, an assistant professor at Harvard Business School, and Ran Kivetz, a professor of marketing at Columbia Business School, make their case for the vice lifestyle in an article in the Harvard Business Review.
One of their studies polled college students and alumni on the subject of spring breaks. Regret about not having spent more money or traveling during breaks increased with time, whereas regret about not having worked, studied, or saved money during breaks decreased with time.
The authors write: “We saw a similar pattern in a study of how businesspeople perceived past choices between work and pleasure. Over time, those who had indulged felt less and less guilty about their choices, whereas those who had been dutiful experienced a growing sense of having missed out on the pleasures of life.” (As the old saying goes, nobody dies saying “I wish I’d spent more time at the office.”)
The authors also did a study of mall shoppers, asking about their regret about buying an expensive item of clothing. Those who anticipated short-term regret bought less-expensive items, while those who anticipated long-term regret splurged. “Thinking about short-term regret drives consumers to be virtuous, while thinking about long-term regret leads them to be extravagant,” the authors write.
Luxury-goods makers, of course, will eat this up. I can see the slogan now: “Luxury: It’s Good for Life.” Or “Cartier: You’ll be sorry you didn’t.” Whether luxury is good for your finances is another matter. (Nobody goes bankrupt saying “I wish I’d spent more on Gucci bags).
Wealth Report readers, what do you think? Do the long-term benefits of indulgence outweigh the short-term risks of regret?
http://blogs.wsj.com/wealth/2008/07/07/splurging-is-good-for-your-health/trackback/
------------------------------------------
It appears that being "virtuous" and thinking about the effects of your behavior pales in comparison to the regret you may feel when approaching a mid-life crisis and grasping for distant memories. So go ahead, be "extravagant" and "indulge," after all its better for your health! Don't think about the future or the effects of your behavior, that is so nineteenth century. Absurd.
Well, I think I am going to chance it and make responsible decisions anyway. But don't worry, I am also setting aside some extra money to fund the days I will most definately spend in a mental institution for being so "virtuous."
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