Below Your Means: Living well by living within and growing your means

Below Your Means Favorites of the Week (Grease Fire Edition) – June 17

While the world of personal finance is interesting, I think what is going on in Greece and the rest of the Eurozone will have a far bigger impact on everyday American’s lives than they may realize.  This weekend, along with Monday and Tuesday are going to be extremely telling for how bad things could get and how quickly.  It will also tell us if the powers that be are able to “kick the can” a little further.  Please note, of all events going on in Greece right now… NONE of this is about fixing anything or evening attempting to fix things.  It is only about delaying the inevitable, which is a Greece default.

With so many great posts in the world of Personal Financial Blogs, it is hard to keep up with them all. Here are a few of our favorites from the week:

Personal Finance / Etc.

• Cut your budget (Amanda) – Another good “real world” budget article at The Saved Quarter.
• Personal Finance 101: What is an asset? – If you don’t know, you need to find out.  A major pet peeve of mine is when I hear commercials or worse regular people things like “I am going to invest in a new DVD player”, or “I am going to invest in some new clothes”.  While both clothing and DVDs are indeed “assets” they are anything but “performing assets” and they are certainly not “investments”.  In fact they are “depreciating assets”, which means they go down in value over time.
• To donate or not to donate?  Financial, Ethical and Physical Concerns of Egg Donations – I found this interesting.
• We are not saving enough for retirement – Put this in the “duh” category, but to anyone paying attention this should be obvious.  Unfortunately, our government and central bank is making it damn hard to do so.  With 15% of all Americans on Food Stamps and 50% of Americans not able to come up with $2000 in 30 days, is it any wonder our collective financial futures are in question?

  This week we are running a series on saving and building your net worth, please do check it out.  Also, consider our feature last week on Tracking Your Spending and Budgeting.  Remember, one way to get ahead of the savings curve is to live Below Your Means!

Economics / Investing

• IMF “Ready and Willing” to Throw Away More Money; 10 Point Summary of Sorry State of Affairs; Market Repeatedly Calls Foolish Bluffs by IMF, ECB – Mish provides a good breakdown of the flawed thinking at the IMF.
• “Greece On The Verge Of A Precipice” As A “Lehman-Like” Avalanche Could Be Set In Motion As Soon As Sunday – Zero Hedge provides a short summary of what’s going on in Greece.
• Guest Post: Why The Wheels Are Falling Off China’s Boom – A fascinating read on the coming bust in China.

Other

• Congrats go out to the Bucksome Boomer on their 500th post.

Below Your Means Favorites of the Week

With so many great posts in the world of Personal Financial Blogs, it is hard to keep up with them all.  Here are a few of our favorites from the week:

Personal Finance / Etc.

• The Power of a Well Written Letter – The College Investor provides a real world example of how a well written letter can get things done.  I complete agree and have personally taken advantage this approach many times.
• How Do You Earn Your Money – Discusses the “poor” and “rich” ways of making money.
• Cut Your Budget: Allison – These posts are great.  It’s a real-life account of The Saved Quarter helping someone cut their budget.
• Insure with friends – I am a big fan of self-insurance, but I had never thought of “social insuring”.  Krant Cents has a post about a German company that does this.  I think its a very interesting idea.
• When do balance transfers make sense? – I have posted about balance transfers in the past and they often are not as good of a deal as they seem.  My Personal Finance Journey has a pretty good post on the topic.
• Top 10 Cheapest Places to live in the US – I have often thought about moving to a cheaper place to live (Seattle is pretty expensive), but never got close to making the switch.  This post is from someone who did.
• A pension, seen as a blessing and a curse – Budgeting in the fun stuff, has a interesting post on pensions.  I am used to reading about pensions in the macro-economic sense, so its fun to see the other side of the coin.
• Car Insurance Discounts: Are you getting all the discounts you are eligible for? – This is a good post and worth reading to make sure you aren’t missing out on anything.
• Why student loans are the worst kind of debt – If you have read any of our posts on student loans, you know we are not fans.  No Debt MBA has a good post exploring the problems with student loans.

Economics / Investing

• QE2 Was a Disaster: Here is why US Fiscal “Stimulus” was a complete failure as well – This post is a bit heavy, but it is amazing to see what actually happened from the fiscal stimulus plan and how it was a complete failure.
• Europe’s Central Bank could be whipped out with a simple 4.25% drop in assets – Zero Hedge has a very interesting post on just how much leverage and risk the ECB has.  Greece, Ireland and other Europe countries are buckling under the strain of debt… when those countries start to default, things could get messy in a hurry.
• Bernanke’s Self-Serving Bold-Faced lies – Mish is certainly not a fan of Mr. Bernanke and shares his views of Ben’s recent speech here.
• Valuation-Informed Indexing vs. Passive Investing – Which is better? – This is a very interesting post with some excellent analysis over at My Personal Finance Journey.

Weekly Review – 5/1 to 5/7

There is a lot going on in the world today, after reading 100′s of blog posts across the personal financial blog-o-sphere; here is what we found interesting this week:

Living Richly – Spending money where it matters, enjoying living below your means

• Peer-to-Peer lending just got a little harder - Both Prosper.com and LendingClub.com this week made changes that “help protect the identity of borrowers” and also make it harder for lenders to ask them questions.  Fivecentnickel.com has more.
• Inflation is the most evil tax of all - MintLife questions should you believe government inflation figures (we here at BYM certainly don’t)

Frugal Tips – Spending less on what doesn’t matter, great deals and more

• ATM Fee News – Chase decided this week to end their trial run of a $5 ATM fee (instead of the usual $3).  $3 or so is still too much in our opinion, for what is a very high profit aspect of banking.  In short, if you are paying ATM fees you are probably doing it wrong and should look for a credit union or bank that doesn’t charge them or even reimburses you for other banks fees.  Over to Bankaholics for more.
• Be careful with extreme couponing – While taking advantage of good deals when you find them and buying some things now that you expect to be more expensive in the future is prudent, going nuts is… well just nuts.  Money Fest has more.
• Insurance that is a complete waste – Fivecentnickle also has a good article with 4 types of insurance that are total waste of money.  We would like to add to the list: Rental Car Company provided insurance and most “extended warranties” which are really nothing more than expensive insurance plans.
• What to save up to $200 a year? Consider washing all your laundry in Warm-Cold or Cold-Cold cycles.  Check out the Laundry Cost Calculator.

Economics / Investing – What’s coming next

• Silver had a very exciting week – Silver dropped from $48 to a low of $33 but finished the week at $35.80.  This still is a massive $12 or a 25% drop in a week and goes to show you how dangerous it is to chase parabolic blow-off charts.  Silver is now at an interest price point, resting right around the “consolidation area” of Feb. and March 2011.  Time will tell what happens next.

  In other silver news, apparently China was buying on this dip this week and Mexico was buying gold.  It is also important to note that this silver bubble popping was most certainly helped by the various powers that be.  For example, the Comex raised silver future contract margin requirements an unprecedented 5 times this week.

• Gold held its own this week – While silver got taken out to the woodshed, gold did OK considering.  Gold fell from $1576 to close the week out at $1496.  This is a large $80 move, but only represents a 5% downward move.  Gold bounced off a very important trend line that started on 7/28/2011, if it falls back below $1475 or so, things could get interesting.
• Dollar had a small rally this week – The USD dollar index was up 3% on the week, which is a big move in the currency markets.  Unfortunately, this brings it up against some technical resistance of a downward trend line started in early January 2011.

• Apple a $1000 stock and a $1 Trillion Dollar company? – Ugh.  Personally, we wouldn’t be totally shocked to see Apple trade at $600 in a few years.  It won’t however be the result of awesome earnings growth, instead it will result from inflation and the value of the US dollar being reduced by 30 to 50%.

• Food Prices keep rising -  The UN reported this week that the price of food has hit its second highest level ever.  Bad things happen when people are hungry and can legally pay for what they need to live.

Other stuff…

• Legal online music gets a little bit cheaper -Amazon this week announced that they would start charging only $0.69 for a bunch of songs, including new popular releases.  This is exactly what the recording industry needs to do in order to fight piracy.  Life Hacker has more.
• Diesel Car of the Year – BMW 335d a car we discussed here and here just won “Diesel Car of the Year” by The Diesel Driver.
• Tech / Life Balance – Why this guy returned his iPad. The article is from June of last year, but we came across it recently and think it is pretty interesting.

Weekly Review – 4/24 to 4/30

There is a lot going on in the world today, after reading 100′s of blog posts across the personal financial blog-o-sphere; here is what we found interesting this week:

Living Richly – Spending money where it matters, enjoying living below your means

• When is it better to be frugal?  When is it better to earn more? – Over to The Simple Dollar for more
• Some times it is better to pay a little more – LifeHacker is right on with this article that cheap Android phones aren’t worth the savings.

Frugal Tips – Saving money, great deals and more

• Paying ATM fees is for suckers – If you pay $5 in fees to take out $100 you are being “taxed” 5% by the bank.  That is probably 10X the return you earn on the money in your savings account.  Get Rich Slowly has an article on Five Ways to Outwit the ATM.Here are our quick tips:
  • Use an ATM by your bank to avoid fees
  • Get a bank that reimburses you for other bank ATM fees
  • If you must pay a fee, take out as much as is reasonable.  $5 on $100 is 5%, but $5 on $500 is only 1% – you just cut your “tax” by 80%.

Economics / Investing – What’s coming next

• Silver and Gold continue to be unstoppable – After a small correction, silver and gold are higher on the week.  Silver is up on the week another $1 or so to close Friday at $48.60 and gold closed at a new all time high of $1564.10.
• Dollar testing long(er) term lows – Again, it was only last week that we mentioned the dollar was testing multi-year lows and this week (thanks to Ben and The Fed) it broke through those lows and is now at 73.03 after going as low as 72.8.
• Things that make you go hmmm – McDonald’s Hires 62k people (yea) but turns away over 938k other applicants! These are all people who were applying for part-time, minimum wage work.  If this is what a recovery looks like, we are scared to see a depression.
• Downgrades - Just last week, S&P put the US Government’s credit rating of AAA on negative watch, this week its Japan’s turn.

Other stuff…

• Interesting: Why gas prices go up faster than they come down – Over to Jalopnik for more.  For the record, I believe we will see $6 gas before the next correction starts.
• The original “mudflap girl”?
• New rules mean you are owed more money if you get bumped from a flight.  Good news for passengers. – Over to LifeHacker
• In case you were under a rock this week – there was a royal wedding.
• And hopefully you were under a rock when these hit – $5B in damages, 344 dead with more missing – massive tornadoes hit the middle of the US.
• Finally in a sad case of “look over here, while we screw you over there” Obama released his long form birth certificate.  This was going on the same day The Federal Reserve released its policy statement and Big Ben held The Feds first press conference ever.

Weekly Review – 4/18 to 4/23

There is a lot going on in the world today, after reading 100′s of blog posts across the personal financial blog-o-sphere; here is what we found interesting this week:

Living Richly – Spending money where it matters, enjoying living below your means

• Sitting on a lot of cash?  Using a money market fund to store it?  My Money Blog has a a very interest post on the actual ‘shadow’ NAV of MM funds.
• Where do your tax dollars go?  This site gives you a break down.
• 24 quick actions you can do today to change your financial life forever – Good stuff over at Man vs. Debt.

Frugal Tips – Saving money, great deals and more

• 10 Tips on Growing Your Garden Without Growing Your Expenses
• How I spend money – Good article over at Get Rich Slowly.  This sums up the ideals of BYM very nicely.
• Use It Up, Wear It Out, Make It Do, or Do Without
• Frugal Tip of the week – Don’t spend $30 to rent a move.
• The best deal on fresh produce is probably not at Costco or Sam’s Club? This is interesting.

Economics / Investing – What’s coming next

• Silver continues to be unstoppable. Rising $4 more this week to almost $47, another $1 on Good Friday.  Silver is probably due for a pull back, as the chart appears to be going parabolic.  Parabolic blowoffs are never sustainable, but can run far higher and far longer than anyone expects.  Regardless, Ben and the Fed seem fixed on killing the US dollar in an attempt to devalue our long-term debt.  This means in the long run owning at least some physical metals is only prudent.  Speaking of which, why are pension funds taking physical delivery of actual gold these days?  Apparently they are fearful of a COMEX default.
• Dollar testing long term lows – While talking about the dollar, the dollar index hit new lows this week, breaking the 2008 low of 74.2 and the 2009 low of 75.6.  It settled at 74.1 on Thursday, after going as low as 73.7.  There is pretty good chart support here around 74 from the consolidation we had back in early 2007, but if that breaks and the 2007 low of 70.69 doesn’t hold the US dollar could be in for a scary and disorderly drop.
• Apple fails to see the light again? – Is it possible Apple will fall from grace for a third time in as many decades?  Andriod is not only outselling iOS, it is also going to surpass iOS in total devices very soon.  Now the US Army may be standardizing on Andriod.  On of the comments over at Engadget sums it up well – “exactly what Android does, it OPENS doors – where iOS (Apple) always decides to CLOSE them”.
• QE3 coming? – Really good article on Slope of Hope summing up the last years of Fed acts.
• Max Keiser Documentary On Irish Eco Hell – This was all over the PF blogs this week, its a very interesting video and worth a watch.
• S&P put the US Government’s credit rating of AAA on negative watch, warning they may downgrade it in the future.

Other stuff…

• Weird stuff you can do with your points – View from the wing has a fun write up on a CNN article on strange things to do with reward points.
• Portal 2 was released – The greatly anticipated sequel to an incredible popular game came out this week.  So far, this game has a lot of the magic of the first one.  The new co-op mode is short, but a lot of fun.
• Extreme Couponing and coupon fraud? – This is from 2 weeks ago, but we wanted to add it because it is a very interesting read.  It also has some good information on how coupons work.   Head over to Angry Cheapstake for more.

Weekly Review – 4/11 to 4/17

Living Richly – Spending money where it matters, enjoying living below your means

• British Airways Credit Card – 100k Mile Bonus – A few blogs have picked this up, looks like a pretty good deal.  My Money Blog has a good write-up on it.
• It may be fiscally prudent to get a house cleaner – Parenting Family Money has more.

Frugal Tips – Saving money, great deals and more

• 10 Tips on Growing Your Garden Without Growing Your Expenses
• T-Mobile has announced $80 unlimited voice, text & data.  This under cuts Sprint’s “Simply Everything®” plan by $20.  This is definitely worth a look.
• How to pay no taxes? Business Week a great list of shelters, dodges and more used by the wealthy.
• Stay Cool, Save Money this summer – EnergySavers.gov has some tips.

Economics / Investing – What’s coming next

• 35% of Illinois State Employees are on worker’s comp – If this is true, it is definitely something for Illinoisan tax payers to get upset over.  Unsustainable trends by definition never last and usually end badly.  Mish adds his comments here.
• Gasoline prices are way up, with AAA reporting the national average to be $3.81.  I fully expect $5 gas by the summer.  Head over to Zero Hedge to read more.  I for one am happy to be driving a diesel.  Be sure to watch out for gas saving myths.
• Silver just won’t quit – It’s up another 7% on the week.  In early morning trade on 4/17 its up another $0.53.  Gold also hit new nominal highs ($1490 an oz) this week.
• Google’s stock got hit hard this week.

Other stuff…

• Online Poker News – Major shake-up – “Poker Stars, Full Tilt Poker, and Absolute Poker (the “Poker Companies”)- with bank fraud, money laundering, and illegal gambling offenses.” – Karl over at Market Ticker has good color  commentary as always.  

• Zero Hedge has a great collection of must see video of Japanese TEPCO reactor damage.  Including unmanned drone fly overs.
  
• Jay-Z has launched a new web site called Life and Times. 

• Life Hacker has – 10 ways to get your creative juices flowing