Budgeting – My rediculous spending habits!!!! April 8th to May 18th.

Being curious as to why I seem to take in a good stream of income and mysteriously have a “less than expected” amount in my savings account, I decided to track my expenses. The results were appalling…

To preface, I don’t want this exposè to be TOO revealing for obvious reasons, but I also want to give a good insight into my life and my habits to paint a clear picture. In fact, after seeing this, I am thoroughly convinced that cost cutting and expense management is one of the most “red flag” issues I have to tackle in my financial life. It is critical to my overall success as someone who strives to be financially free! In fact, I have a hunch that if I am not able to get a handle on this problem right now while I’m young enough not to have kids and a mortgage, I will really regret it later on in life when I start to have those BIG expenses (mortgages, car payments, college for kids). So with this and future similar blog articles , I want to shine a light on this area of my financial life and scrutinize it until I can get my spending down to reasonable, logical, smart levels. Without further ado…

A little while ago (a couple weeks) I did a bit of poking around the internet and found a few good templates and whatnot for showing my expenses by category on the internet. I figured the essential information and whipped something together quickly to reflect what I wanted and here it is….(details explained below)

So how does this seemingly simple thing work and how did I create it?

1. For the entire month of April I made sure to spend all my money using my credit card. I did this just so that I could have a clear and accurate view come statement time that is all categorized and well documented in each place.
   1. Another good reason for spending all your money on credit card is rewards, but thats another story for another time.
2. I created the categories that I wanted to track. Theoretically, all of the expenses in my life at the moment should fit into one of these categories.
   • Dining out, entertainment – any kind of beer run, restaurant, date, movie etc expense
   • Misc – Haircuts, toothpaste, random stuff that comes up
   • Gas – obviously the gasoline that goes into my wonderful car that takes me to work and wherever else I need to be goin.
   • Rent – the cost of renting a space to live and store my worldly belongings
   • Special – This is the stuff that comes up every month and though it is something different and special every month, it is routine enough and BIG enough that I might as well track it. When I say this I mean like REALLY close friend or girlfriend’s birthdays, Christmas, anniversaries, graduations, these big things that seem to happen all the time.
3. I did a quick figure of how much I maybe should be spending in each category at the moment (before knowing what the real numbers were). These numbers populate the “budget” fields.
4. I go to my credit card website and do a pull on my expense for the last billing period which shows me all my spendings in the window that I desire information on.
5. I go through and put each expense into one of the categories defined above and tally up the sums for each category (the “actual” fields)
6. I scream and scratch inside my soul at how off some of my “should be” estimates were
7. I make goals for myself under the “stretch” fields to reflect what I would like to be spending in those categories (realistically)
8. Now I write this article.

So now, what are the key takeaways from reading this article? What the hell is the point of my spilling my beans on my life expenses to you? Well because America as a whole is plagued with this problem. People living beyond their means, people trapped in debt, needing to “consolidate their loans”, making minimum payments, letting their balances grow as they pay off only interest and little principal. This IS a real problem and if you are reading this and you are inspired to take a closer look at your own lifestyle and related expenses, then that is good enough for me. Better yet – if what I’ve done so far to try and reverse my problem helps you anyway in getting a head start with your problem, EVEN better! Best yet, you do the above, tell me how to improve how I communicate it to you and others like yourselves, and we can make the world a better, wiser place, one dollar at a time, because God knows I will fix this for myself, and you know what, you might as well follow along and we can help each other out along the way! If the last sentence or two sounds new to you, maybe you should check this page out. Thank you all very much, comments are greatly appreciated as always.

In the meantime, check this song out: If I Never See Your Face Again by Maroon 5

An Introduction to Frugal Living…

Okay, I admit it, I am not the best resource on living the lowest cost lifestyle nor am I the best deal hunter or coupon stickler out there BUT if there’s one thing I am good at, its living the way I want to without breaking my bank. So let me take a step back and define this a little more. In my opinion, it’s really annoying to have to live my life thinking about every dollar right? It’s just not fun, and it’s just not quite LIFE. It’s my philosophy that there is just too much to do in these lives of ours to be living day in and day out concerned about money! This is absolutely not to say that we should just ignore our retirement plans or savings accounts and go vacation and get ourselves eyeballs high in credit card debt. What I mean is that we are all clever enough, and the world is COMPLEX enough for us all to be able to find loopholes in the system (wherever they may be) to live the way we want to while maintaining a healthy balance (pun intended) in our financial lives.

Have fun without being…

Example Scenario #1 – Something all of us guys have to face at some point or another…

You’re planning a date for the girlfriend – which means you have to go through the whole process of identifying a fantastic restaurant with a good feel and good food and located in a good area or whatever. Instead of just calling and making a reservation at a place you heard about, why not go look up that same restaurant on CitySearch and see if they have any special promotions going on? Or check out Entertainment for their whole suite of awesome coupons. These can really help bring the budget of the dinner part of the date from like 30 bucks to 15 giving you a whole extra 15 to go spend on a movie, or watch some play or whatever your bag is!

Do yourself a favor and support those kids that sell those coupon books that are targeted for the area in which you live. This way you can save a ton of money going to great restaurants at half the price! They often have a whole section in there just for non-restaurant stuff too, like winery tours, local attractions, movie tickets, museums and all that good stuff so you only have to use coupons 2-3 times a year to make up for the cost. Keep it handy in your car or something too so that you can always look at it or have your date look at it while driving. Believe me, it’s so endearing when your girlfriend helps look through the coupon book to help save you money, then you know you got yourself a good one but thats off topic

Example Scenario #2 – After dinner you’ve gotta do something!

So you’ve just had dinner, the night is still young and there’s nothing you’d both like to do more than relax and watch a movie and be entertained for the next 2-3 hours. The problem is movies cost an arm and a leg nowadays and throw in parking and all that and you’ve got yourself another 30 dollar event for the night. Instead of going to the local theatre at the mall, try looking up one of those smaller, older theaters that plays slightly older movies (like from a month ago) for super cheap. Admission might be $3-$5 instead of$9-$11 per person! My girlfriend and I go to this local theater called the Admiral Twin Theater. It’s really old and the chairs aren’t exactly the comfiest, but I swear, every time we go, there’s only a few other people there which means we get the best seats in the house and it feels like its just us two in the theater! That and they’ve got this awesome popcorn with cheese powder that we both love that normal theaters never have!

See both of these methods allow me to live my life much more extravagantly but still at a very reasonable cost! For some reason, this particular post is all about dates but I know that before I started thinking about these kind of things, my weekly date nights could cost me up to like $60! Just knowing that I’m doing the same stuff and sometimes more memorable (having our own private movie theater!) for like 25-30 is super cool. Anyways, hope you find this useful and please leave comments!

My first Big Win!

Thank you rumor mill. Yesterday you made me a ton of money!

So I wanted to do a post about this while it is still fresh in my memory. Yesterday I woke up in the morning and got ready to go to work. Like always, I get up, open up a browser to my google homepage (now called iGoogle apparently) and check my watched stocks (mostly all tech, the ones I’ve been in and out of)

To my extremely pleasant surprise, Yahoo! (YHOO) jumped up 20% to 33.5x ish. I was about 5000 invested in this stock before the jump and afterward I was at a total equity of about 6030. It was an awesome morning and it all started because apparently the New York Post wrote an article about how Microsoft had once again entered into formal talks to purchase Yahoo! for 50 BILLION dollars. Apparently it is all because both Microsoft and Yahoo had failed to acquire the online advertising company “Double Click“. In fact, Google acquired them. Now Microsoft and Yahoo want to perhaps team up to battle the online advertising giant Google.

I always get really scared when I’m about to sell a stock because I’m afraid it might continue to skyrocket and I’ll miss out on a lot of growth. In fact it is this that has led me to a lot of downsized wins because the stock ended up going down instead. In this case however, I decided not to be greedy and just sell. I locked in all the money and I felt good about selling at the top of the day. BUT!!! What made me feel even better was that later in the day, the talks were stopped and the deal stopped right there. This means, and I’m guessing (and maybe betting) that Yahoo will fall right back down to where it was before and possibly even lower prior to the huge jump. After all, now they have no reason to have jumped so high in the first place right? Here’s a snapshot of my Yahoo! related play:

05/04/2007 11:02 AM	Sold	80 YHOO@$33.55	$2,683.95	Executed
05/04/2007 11:02 AM	Sold	100 YHOO@$33.55	$3,354.94	Executed

05/01/2007 1:01 PM	Bought	100 YHOO@$27.60	$-2,760.00	Executed
05/01/2007 09:56 AM	Bought	80 YHOO@$28.06	$-2,244.80	Executed

Interestingly enough, Microsoft had very little change, in fact they dropped a tiny bit. Very interesting, I’ll have to learn why that happened.

So thats that, it concludes my first huge win in the stock market and I’m currently up about $1300 from an initial investment of $7000 – thats 18.x% return within 2.5 months if I stop right now, which I probably won’t so we’ll see if I can keep up the performance throughout the rest of the year.

I’m definitely not going to take credit for this sweet call as it was mostly a random piece of news that attributed to the gains. However, I would like to explain why I was in Yahoo in the first place and give a little reasoning to how I pick and choose stocks that I own. I’ll put that in the following post!

This describes my feelings at the moment…

Yahoo by Roy Jones Jr.

Picking Individual Stocks as a Beginner: A look back over the last 3 months

So I started my Zecco account just less than 3 months ago in order to start playing with individual stocks. I started out with $3000 and within about 5 weeks I felt it wasn’t enough so I put in another $4000 putting my total cash investment $7000.

Before I started I had only read Jim Cramer’s book “Real Money”. It was full of good introductory information if not a little bit too self-promoting (I’ll get into it later) but it definitely gave me a lot of the confidence and ground rules that I needed to get started. Slightly less than 3 months later, I am about $400 up which is a good 2-3x what I would have made in a traditional high yield savings account like HSBC or ING Direct and a good 100% ahead of a few major ETFs that track the SP500 (like SPY) so I’m pretty pleased. Zecco has been really good too because the commission cost is free so I don’t get like 7-15 dollars eating away at each transaction so keep that in mind!

Some of the stocks I’ve invested in over the last x months are as follows

Real Networks - I bought this as my first stock because I used to work here. Didn’t know much about the stock but it had just dropped like 28% overnight before I got it so I figured it was a good buy. Over the next several weeks it alternated quite a lot but mostly dropping lower and lower, I bought more and more until I was about 300 dollars invested in this one stock. It wasn’t looking good so I finally sold it one day when it jumped up for whatever reason. I broke even and even made a nice double digit profit. Not too shabby for my first stock.

Yahoo! - Yahoo! is a fantastic company and I was fortunate to buy it at a good bottom. I held it for a long time – almost 2 months – before I sold it. Incidentally the next morning they released their predictions for the next fiscal year and the stock dropped like 12%. I picked up a couple thousand dollars worth again at this point and started buying it as it went down lower and lower as a result of overreactions to their prediction announcement. I’m currently holding this having bought at 27.6x and it’s doing well for me so far! I’m hoping for this stock to go as high as 29-30 before I’m willing to let it go (having got it at such a sweet price!)

Google - They had some good jumps in the last week or so but I largely missed that. I bought 2 shares as my second stock purchases after Real Networks at 439. It was about as low as it got/has been for the last couple months. I sold it again when it hit 465 so I made a good 40 bucks or something. It stayed around there for a long time before it jumped to 480+ this week, now its back down around 460-470 ish… GREAT Company, one of my favorite and most respected companies in the world. But they just aren’t growing as fast as they used to when they first started. The high price tag (although somewhat meaningless) makes this stock difficult to speculate off of now, which is a good thing overall for the company and its customers, but a bit more difficult for us investors. Props to you Google for stabalizing your hot stock!

Vonage – This is my horror story. But I also learned so much for owning and selling this stock. I bought at a terrible time, right when they dropped a ton and still had much more to drop. Also, they were in real danger of having their entire business swallowed up by their legal troubles. I bought it at 3.38, sold at 3.08 or something terrible like that losing around 150 dollars. My biggest loss. 2-3 days after i sold, it sky rocketed to 3.70, which would’ve made me 400 dollars or more if i had stuck to it. Oh well! Lesson learned, know what you’re looking for when you go in and when it satisfies that condition or doesnt, then get out. Don’t wait around trying to hedge your losses. That’s called escalation of commitment. DOH! Like i said though, lesson learned for sure!

Marvell - Kind of a boring stock. Held it for a super long time, hoped for much more but finally sold it today at a decent price making around 70 dollars or so. I think it wouldn’t be a bad idea to hold on to this for a few months and see what happens because there’s definitely an opportunity, I just don’t know when or where it’s going to happen.

Well that’s all for now, I just wanted to give a little insight into my stock trading (a intro actually) life. It is very interesting and exciting and I’m learning more everyday. I’ll be sure to make another post later about exactly what i bought at what price and when so u can see the whole transcript. Also I’ll later do a post about my actual strategy, which will be mildly insightful (I’m still new!)

Stay Tuned!

Here is a good song that stays to the theme of these stocks… Guess what it is!!
Technologic by Daft Punk