The Value of Time, The Cost of Impulse, Hover Your Mouse

Posted on May 11, 2011 Written by Leave a Comment

Sounds like a great title doesn’t it!  What inspired me to post this evening?  Well, it’s as simple as an unbelievably obvious trap posted on Facebook that has been rampantly unleashed…

…it’s a trap that not only takes up your valuable time, but also spreads the disaster across every one of your friend’s walls, taking up their time…

…all because of impulse.

Let me jump to the moral of the story, even though I think I’ve mentioned it before.  Time is valuable, and there are thousands of @$$holes out there who don’t care about your time, and plan to attack you and your ignorance at every turn.  (Remember, ignorance just means you don’t know this fact.  It doesn’t mean you’re stupid inherently.)

One of the most overlooked aspects of most people’s personal economy is the actual value of their time.  A) You are worth more than you think you are. B) You are worth more than you think you are.  C) I’m wasting your valuable time by writing this a third time.

Your wage at work is not a defining factor of your value, because you aren’t working 24 hours, 7 days per week.  When you’re not working, what would you ask someone to pay you to give up your free time?  $25 dollars per hour?  $50?  $100?  Consider this as you spend free time.

Back to the problem at hand.

Online phishing scams, (which chew up your free time) are extremely easy to avoid, as long as you develop the mindset that they exist [and will never go away] at nearly every turn you take.  If you adopt this way of surfing then you’ll always be aware that you are a target in the scope of an unknown online “terrorist” (I know, exaggeration, but it feels like it anyway) looking to suck the life and time out of you (didn’t we establish that you’re worth more than you think?)  Many times the only thing that it accomplishes is eating up computer network bandwidth to slow down the system overall, i.e., Facebook.  Imagine what’s going on when a link that you click sends a message to all of your friends.  That’s 500+ (oh, sorry, are you not that popular?) people or even more that will get a message…times 500, times 500, etc., until millions, even hundreds of millions of people receive the nonsensical message.

So, how do you avoid these?

Concerning hyperlinks (if you don’t know what a hyperlink is, turn off your computer forever, or read this,) take it upon yourself to do a quick verification of the destination of the link.  P.S., this is a perfect opportunity to try out that hover idea, which I’ll explain below.

When you encounter a hyperlink, hover your mouse over it before you click it.  When you hold your mouse over the link, you’ll see, in the status bar at the bottom of your browser, the actual address that the link opens is revealed.

If the destination in the status bar is unrecognizable to you, DO NOT CLICK THE LINK, unless you know for certain you were expecting a message from someone with a specific link.

If the destination in the status bar is recognizable, but you’re unsure…DO NOT CLICK THE LINK. Instead, research the validity of the message sent to you.

Soon, you will come to understand that the time it takes for you to deal with these annoying problems isn’t worth the time it takes to deal with these annoying problems.  I know, like I said before, again, it sounds repetitively redundant, as well, but…

Anyway, as I was saying, sometimes the goofy messages you receive aren’t worth your time anyway, because the person sending them isn’t aware of the value of their own time.  So, if the link you receive is legitimate, but it encroaches upon your valuable time, politely delete it :) .

 

 

Filed Under: A Call To Action, Basic Life Skills of the 21st Century Tagged: , ,

What If You Don’t Know Your Future Income?

Posted on November 15, 2010 Written by Leave a Comment

A Twin Cities connection of mine, Jerrid Sebesta, is a fellow hard-core money mastering fool like myself.  He’s also a meteorologist.  Why anyone would study meteors is beyond me.  They’re too fast…and haven’t you seen what will happen to Earth some day?  Just ask Bruce Willis and Morgan Freeman.

“ooh how I wish it would rain down…”

Jerrid is also a guest-blogger who contributes to the Life & Money section of momslikeme.com. His most recent articles on personal finance touch on the dreaded “B” word, a topic I’ve written about quite a bit as well.  In an article entitled, Budget Basics, Jerrid shows you a simple spreadsheet budget for the average income earner, whereby every penny is spent before the month begins.

If you aren’t familiar with this concept, get familiar.  It’s critical to your financial success.  Before you start your month, you need to assign a destination for all of your money, yielding a zero balance before the month starts.  In other words, if you make $4000.00 net in one month, all $4000.00 needs to be given a name and a place.  This will help you avoid the “too much month at the end of your money” problem, as Dave Ramsey says.

But what happens to your budget when you don’t have a regular income?  How do you assign your money to an expense plan if you’re 100% commissioned?  It’s easier than you’d think.  In Jerrid’s example, there’s only one thing that I would change, and it’s simply a preference.  I would prioritize the expenses on the spreadsheet.  For all intents and purposes, the result would be the same in his example, so it’s not too much to fret over.

For those of us who don’t know when we’re going to get paid next, it’s critical that we use a prioritized spending budget. It’s pretty much the same concept, and the end result is similar.  The major difference is that with a regular income, you’ll be able to balance your monthly budget so the resulting difference between your income and expense is zero.  In a prioritized spending budget, you’ll probably have a negative number at the bottom of your page until you get paid.  Some months you’ll see a loss, some months you’ll see gains.

Whatever it may be, you’ll need to start by listing your expenses in the order of priority, always starting with the 5 basics in this order:  1) food, 2) utilities, 3) housing, 4) transportation, 5) clothing.  Continue with all of your other expenses as you know them, and then when you’ve got everything written down, begin asking yourself the following question.  “If there was one thing that I absolutely had to spend my money on this month, what would it be?”  Put a #6 next to that thing (you’ve already got #1-5).  Ask the question again, and put a #7 next to that.  Keep going until you reach the end.

If after you cover your basics, you’re out of money, then you need to make some serious changes.  You either need a new job, or you need to lower your housing lifestyle (remember, no more than 25% of your take-home pay.)

Be careful though.  With a prioritized spending plan, it’s much easier to stray from the plan, because you don’t know how much you’re going to make, and you may hit a big sale one month, giving you the false sense that you’ve got all kinds of money.  Don’t fall into that trap.  In fact, when you start to refine your craft to the point of making a regular average income, you can modify your spending plan to reflect a steady figure.

For instance, if in 2009 you were paid $64,000 in commissions erratically in only 4 months out of the entire year, then you can create a baseline target goal of +/- $64,000 for 2010.  Then, because you don’t know if the year will be as good as the previous, write your budget based on a $42,000 annual income, and stick to it, socking away all of the extra money for a rainy day.  If you continue to increase your income over time, you can adjust your “salary” to fit better.

A common mistake people make is to see that big commission check as a huge bonus that they can just spend, because, “hey, I’ll sell the same deal next month.”  Not a good plan.  Tighten your lifestyle so that it doesn’t bleed you dry.

Whether it’s a prioritized budget for the unknown income, or a steady budget for someone who knows how much they’ll be paid every month, having that plan will not only result in financial success, simply knowing the details will alleviate all kinds of stress in the family.  Don’t be frustrated if you don’t get your budget right the first time.  If you do, you’re a superhero.  Trust me, you will make mistakes and it will take a few months to refine it and deal with the various compromises you and your spouse may have to make to dial in a good plan.  Remember, if you’re married, you both have a vote.

Filed Under: Financial Basics, Personal Finances, Planning and Budgeting Tagged: , , , ,

Are You Running Red Lights With Your Money?

Posted on September 14, 2010 Written by Leave a Comment

There are 3 things that you can do with money.  You can give. You can spend. You can save. Concerning spending, there are two ways to measure whether or not your spending is effective in your life.  The first way is obvious…profit.  When you spend $1.00, will it return you $1.25?  Can you spend $7.00 on an antique dresser, refurbish it, and sell it for $70.00?  The second measure is utility.  Utility is a micro-economic term to describe an acceptable measure of enjoyment that you receive as a result of spending money.

One example I can think of is an ice cold beer at home versus an ice cold beer at a sports bar.  A 12-pack of beer will run you around $12-13.  That’s about $1.00 per beer.  A beer at a bar will run you $3 to $6 depending on the time of day.  The beer is the same, but the atmosphere is different.  If you’re willing to spend 200% more on a beer at a bar because the added benefit of being social is worth three times the cost, then to you, the measure of utility returns dollar for dollar, at the very least.  You see, when you spend $3.00 on a beer, it needs to be worth at least $3.00 to you for it to make sense, OR you’d have to be able to justify it by re-selling it for a higher price, which you aren’t going to do with this particular example.  For most, the $3.00 beer is worth far more than $3.00 as a measure of utility, which makes it a green-light expense.

When we increase the cost of doing something, the corresponding result must be either a financial gain, or a measure of utility that outpaces the cost.  If the incremental increase in cost does not return a greater increase in profit or utility, then it’s not worth doing, and will actually become a cost center in your life, hurting you in the long run.

We live in a world where there are plenty of “red lights” to indicate that we should not be spending, yet we see only green lights.

This isn’t so complicated, yet too many people act as if it is a green light world and run red light after red light without so much as tapping the “expense brakes.”  This process is about scrutinizing your results hard and understanding exactly where they come from.  Don’t pay for a second of anything until you’re sure the first one is producing great results!”

-Gary Keller, The Millionaire Real Estate Agent

Take inventory of the recurring expenses in your life that aren’t producing either a financial gain or increase in utility.  If it’s not doing anything for you, stop spending it.  Are you banking somewhere that charges you fees to hold your money?  Move your money somewhere else.  Are you parking in a paid parking spot when you live only two miles from work?  Ride a bike.  Is your girlfriend spending your money?  Shoot her.  (just kidding…please don’t shoot anyone, unless you’re a film maker.)

The whole point is that if you’re spending money without knowing about it, and you’re afraid to reach into the cookie jar (look at your financial situation), then you’re probably running red lights with your expenses.  Stop at the next red light and ask yourself if the money you just spent was worth spending.

Filed Under: Hey! Wake Up! Tagged: , , , ,

Facebook Question and Answer: Public Schooling

Posted on August 2, 2010 Written by Leave a Comment

I asked the following question today on Facebook:

“When did the idea of sending our children off for the day to school become the norm?”

The answers I received were interesting. Within 35 minutes I had received 3 comments, all from women, that implied that they inferred something other than what I had originally asked. All 3 of them have children, and only one of them, to my knowledge, home schools. All of the answers seemed to trigger an emotional response, most likely based on the experiences each of them have had with their children.

Answer 1: Answer one was actually a question that implied that my original concern may have been centered around the amount of time that a parent may be separated from their child during the school day. “What do you mean? Too long of a day?”

Answer 2: One respondent focused on what she believed to be the norm for her. She has raised her children in a home-school environment their entire lives.

Answer 3: The third response was the one that sparked this article. The commenter stated the following:

“Because society expects both parents to work now and to keep up with the [Joneses]. And society tells us the school environment can offer your children way more that you can at home.”

There are a few things I gathered from these answers:

  1. Women are more likely to answer questions about raising children than men are. Is this an indication that men are not as involved as women are, or is it just confirmation that the men are probably off working.
  2. None of the responses actually answered the question. That’s expected.  It’s often that a man who asks a literal question may not get the answer to his question because of the differences in communication styles of men and women.  I have found that women rarely answer literal questions, and usually go for the perceived hidden message, of which there usually is none.  This is also something that happens when the written word is misinterpreted due to lack of body language and vocal inflection.
  3. Respondent A may feel like she doesn’t get to spend as much time with her children as she wants.
  4. Respondent B may be very pleased with her choice to home-school her children.
  5. Respondent C is probably not happy moving with the crowd and craves escape from the social norm.

And so, my response to answer 3 illustrates something I learned from Dave Ramsey.  It’s a story about primates and behavior.

A study was conducted where scientists placed monkeys in a room that had a tall pole in the middle.  At the top of the pole was a bundle of bananas.  The monkeys would clamber up the pole towards the bananas, but the scientists would knock the monkeys off the pole with a fire hose.  The monkeys learned that it was “dangerous” to attempt to go for the bananas.  Every time the scientists added a new monkey to the room, that monkey would head straight up the pole and get himself knocked off with a blast of water.  As time passed, and this happened over and over again, the other monkeys, in an effort to “protect” each other, started to pull the new monkeys off of the pole as they attempted to reach their goal.  Pretty soon, the scientists stopped using the water to knock the monkeys off the pole because they had all learned to pull each other down.  They started to replace the monkeys one at a time, and each new monkey would be pulled off the pole, until all of the original monkeys had been removed from the room.  None of the monkeys in the room had actually experienced the blast of water, yet they had all passed down a learned behavior; they had all agreed socially to drag each other down and prevent reaching their goal.

Humans behave as stupidly as monkeys do.

If you’re around people who drag you down, you may be at risk of believing that the goal you set isn’t allowed by “society.”  Don’t listen to the masses, because they’re often leading you nowhere.

Filed Under: Hey! Wake Up! Tagged: ,

A Complete 180: Is The Glass Half Full, Or Half Empty

Posted on June 30, 2010 Written by Leave a Comment

June 30th.  The end of the 2nd quarter, but more importantly, the half-way point between 2010 and 2011.  6 months ago you resolved to change something about yourself.  You had lofty and ambitious goals.  You had your eye on the prize…you were…motivated.

Most people peter out by the 45th day of the year.  I attribute this to speaking your resolutions (which I don’t believe in) without realizing that you need to set goals, and more importantly, you need to write them down.  Just telling someone about what you “resolve” to do sets you up to “resolve” to fail.

Oh sure, you’re thinking, “no…not me…I’ll get around to it before the end of the year.”  Sorry, no you won’t, unless you write it down, and become more intentional about the way you live your life.

I set one master goal this year.  That’s it, just one.  It involved little goals along the way, but for the most part, it’s a huge goal.  My goal, as stated and written, as evidence here, again, is to pay off everything but the house.  Guess what?  I’m almost there.  I set my sights on it, I wrote it down, and it will happen. I also set some other goals that are a continuation of good habits that I have been forming over the past few years.  I’m still swimming 3000+ meters each week, I’ve danced more, I’m playing the piano more, I’ve increased my income, I hosted a party for the first time in years, I sold my car, I learned some new recipes and cook for myself more often now…

…basically, I’m being completely intentional about changing my life from that of a rather immature person, to one who takes responsibility for what’s going on around him.  Things no longer happen to me…I happen to them.

Did you say you wanted to achieve something on the 1st day of 2010 that you haven’t even attempted yet?  Why not?  Why haven’t you done it?  What’s stopping you?  Is it fear?  Stop it!

Get it done.  Do it.  Stop making excuses.  It’s hard work.  Nothing worth doing or having in your life comes easily.  Just get off your butt, and do it. If you don’t, you’ll probably be staring yourself in the face with a realization that your glass is half empty.  You started the year with a full glass, and you’ve slowly drained it to the half-way point, and you feel exhausted.  Those of us who started the year with written goals started with an empty glass and slowly filled it with accomplishments.

By the end of this year, I will have a full glass, and I will drink it in with glee! (Literally, not the TV Show.)

So, here we are, 180 days into the year, and we’re about to begin the 2nd half.  Make certain, if you’ve traveled the past 6 months without achieving any of your resolutions, that you not beat yourself up about what you haven’t done.  Instead, adjust your expectations, and start climbing the mountain you told yourself, and everyone around you that you would be climbing.  There is no shame in starting NOW, but you have to start.  Nobody is going to do it for you.

Don’t say:

“I want to lose weight.”

“I want to spend more time with my family.”

“I want to work less.”

Rather, say things like:

“I will lose 3 lbs every week for the next 26 weeks.”

“I will set aside my Saturdays between whenever and whenever to spend time with whomever and whomever.”

“I will say no to working beyond what I agreed to when I was hired and make sure I’m done by 6PM.”

“I will set personal boundaries in my life, and most of all, I will learn how to use the word ‘NO.’”

Your progress must be measurable, quantifiable, and noticeable by yourself and others (as though those aren’t the same things.)  If you don’t measure your progress, which requires recording the state of being at the beginning, then you won’t have a clue as to how far you’ve actually come.  Don’t be embarrassed, we all have goals we haven’t achieved yet.  Most of them were never written down.

Get up, get going, and I’ll see you in 6 months, debt free, and if you’re daring enough, write your goal in the comments here so someone can ask you if you’ve reached it.

Filed Under: A Call To Action, Baby Step 2, Hey! Wake Up! Tagged: , , ,
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