Sunday, June 24, 2012

Blog Suspended

This blog is being suspended until after I finish my CPA examination.  I will still reply to comments, however no new articles will be published.  Thank you for your understanding.

Saturday, June 23, 2012

Truth about Gleim Refund

If you have read a few articles here, you'd know that I have been studying for the CPA exam for the past 4 months.  I can think of much more exciting and fun things I could have been doing in this time, but I'm too busy thinking about qualified verse unqualified reports.

Anyways...I purchased the Gleim CPA review program that cost me about $1000 after tax and shipping.  In my opinion, the program was terrible.  I'm certain that if you were a 4.0 student in high school and college, the program would have worked great.  For someone who is a B student, it was awful for several reasons.

Reason number was boring.  Not that studying for the CPA is exciting, but I wanted to pull my hair out trying to pay attention to the PowerPoint presentations.  Reason number two, the customer service was terrible.  I have countless e-mails going back and forth trying to get my refund.  Communication with my "personal" councilor was a joke.  She congratulated me for failing my exam.

How Gleim refund works is you have to fail all 4 parts to get your money back AND use their system the whole way through.  I'm sorry, but I got tired of failing.  So, if you like frustration, and want to fail all four parts, you can get your money back up about 50%.  Plus when I looked at the Auditing part of the material, I knew I just couldn't go on using this system.  I told them I wanted a refund for the whole thing, but they only refunded 2 sections.  I got $212 back.  This is about a 20% refund.  $424 is probably the most that you could get back.

From here out I have am going with Yeager.  I wrote about my problems I had with Becker in a previous article, and Yeager seemed to have good ratings.  The Wiley CPA book is what they walk you through, and after going through the course I feel much better about the material.  Will I pass the exam on the first attempt?  Probably not, but it certainly was much better going through the materials than what I had to go through with Gleim.

Gleim did have a good test system as far as testing format.  The tests looked just like the real exam.  However, the questions that Gleim gave were much more difficult than what was on the real exam.  What I mean by difficult doesn't mean that the questions were any harder, but rather the Gleim questions seems more wordy.

If I worked at a CPA firm that paid my way...I'd go with Becker.  Whether or not Yeager is right for you depends...I can say if I could do it all over again, I would have started with Yeager from the beginning.

Oh, and another tip.  Yeager tells you to take the tests in this order...FAR, AUD, REG, BEC.  Lucky for me I did the opposite!  Don't make the same mistakes that I did!

Friday, June 22, 2012

A simpler life

You've all heard stories about how much simpler life was many moons ago.  I think I was one of the last people in America that had a cell phone.  I still claim I do not have one.  We use it for emergency purposes, and I do not carry it on me.  This is just one of the many unnecessary tools that we spend money on each and every month.  Cable TV, phone, and Internet can easily cost you $150 per month.  If you only make like $30,000 a year that is 6% of your income. 

Growing up we didn't have cable TV.  I remember turning that knob through the 12 different channels including channel U.  I think that was the station we know as PBS.  I remember walking to school everyday, and riding my bike for fun.  We used to ride bikes everywhere.  The grocery store was within walking distance, along with the bank.

Since life has become seemingly more complex, stressful, burdensome, etc.  We have become stuck in this terrible loop of an existence.  Going back to seems like a lot of work.

The funny thing is that going back to basics could be quite easy, and much more enjoyable than people can imagine.  This is probably why it isn't happening.  No real leadership to help give people a vision of what their lives could be like.

Think about this for a minute.  People spend countless hours in the gym.  Running and walking to nowhere, lifting weights and for what purpose?  Well, because we want to stay in shape.  However, Americans today are fatter and more out of shape than ever before! 

Most people live within walking, running, or biking distance to work.  A rare exception are those who do not.  This means within 15 miles.  I can get to work and back riding my bike within 50 minutes.  If I drive it takes me about 35 minutes to and from work.  If I ran, then I could get to and from work in probably 2 1/2 hours in my current physical condition, however if I did this everyday I'm certain I could get it down to about 2 hours or less.

Of course, that would cut into a few companies business.  Companies like restaurants and oil companies would lose revenues if enough people did this kind of thing.  It would also require less maintenance on roads and cars.

Why do people not do this?  I have come up with a few reasons.
  • People feel riding bikes or running isn't safe
  • Riding most bikes are uncomfortable
  • You sweat, and would have to take a shower before working
  • People don't want to get wet
  • Too cold/hot
  • Laziness
  • Peer pressure (few people do it)
It makes no sense as to why more people do not use bikes or their legs to get to work and school.  My daughter and I could ride our bikes to her school, then I could continue to ride to work.

With my recumbent bike it takes care of a few of the reasons I came up with.  The bike is comfortable.  I could ride for miles without any aches and pains of a "normal" bike.  In the morning I do not even break a sweat riding to work.  The bike does most of the work.  With the exception of hills, I'm practically just steering the bike.

If I were in charge of a city, I'd figure out a way to give incentives to ride, walk, and run to work and school.  I can think of several ways to fund it.  Getting several cars off the road would mean less money for maintaining the roads.  Those people who ride should receive cash rewards for not using the roads.  I'd also widen the berms and put a bike lane.

The city I live in put all of these extra wide sidewalks in that hardly anyone even uses.  In my opinion it was an incredible waste of money.  People who ride do not even use them.  Bike riders do not want to ride on cement sidewalks where they can feel a bump ever second from the grooves in the walkway.  Plus most sidewalks go nowhere.  The purpose of roads and walkways to to allow people to get from place to place with the least amount of resistance, and be safe doing it.

Tomorrow I'll be riding my bike to work for the first time this year.  I hope to do this much more.

Thursday, June 21, 2012

Assets that cost less today than in the 80s

If you've read my blog, you'll know that I am not a big fan of the stock market.  I'm not a big fan of gambling at all.  I've never been to a casino nor Vegas.  However, I did play computer poker when I was in Australia.  Boy was the bartender upset after I won a cool $8 from the machine.

I am a big fan of productivity, and certain areas of growth.  I enjoy watching my children grow and learn everyday.  I enjoy watching all the fruit trees I planted grow and start producing fruit along with the beautiful flowers they create in the Spring.  I get satisfaction creating something new, or upgrading something that is old. 

Things that I do not like in the form of growth is cancer.  I do not like to watch my stomach and waist size expand.  Regardless of whether it is slow growth or not. 

When it comes to assets, I prefer an asset that I can touch.  Whether a local business, real estate, coin collection, autographed baseball, 69 Mustang me those have real value.  No one says..."Hey let me show you my stock portfolio.  You got to see how many shares of Microsoft I own!"

However, if you own a 69 Mustang...I'll be impressed.  Especially if you were the original owner or if it was passed down from generations.

I'm not a huge proponent for Gold (I prefer Silver)...however I did read a pretty good article about why gold might be undervalued even at current prices.  The article gives an argument that the Dow Jones was trading around 1000 in 1980 while today is trading 12573.  This is 12.5 times higher today than in the 80s.  The author of course doesn't mention that the Dow Jones consists of businesses, and those businesses are many times larger, and produce and sell many more goods and services.  It really isn't a great example.  However, other than that I think the article is fine.

Tell me what think about the article!

Disclosure - Military Millionaire owns gold and silver as of this article.

Wednesday, June 20, 2012

Having fun...In my Mopar

I wrote this in response to the Toyota Swagger Wagon commerical.  If you haven't seen it, you can click below.  I had planned on making my own music video, but alas I have run out of time.  If someone from the Chrysler Corporation (or one of my readers) would like to put a crew together and help me create this video please let me know.

Title - In my Mopar - Dodge Grand Caravan ES
Military Millionaire (MM) - Yeah this one goes out to all you American minivan families out there, no actors here, Dodge Grand Caravan ES in the garage.

Wife - Where my mothers and fathers at?
MM - Where my kids at? (Ashley pulls on my pants)...oh here
Ashley - Where's Alan at?
All - Where's Alan at? (repeat 5 times until Alan shows)
MM - Check it...Life is Grand, in this Caravan, life is good, V6 under the hood.
Life is great, I'm never late, cruise through the street, packing fake heat (fire fake gun...pop).
Wife - Your in command, in a Grand Caravan.  You’re in control, feel the A/C flow.
You’re on a roll, with your music rocking, no neighbors knocking, just you and the road.
All - In my Mopar, In my Mopar, In my Mopar, not your ordinary car. (repeat)
MM - Yo, listen, how this story goes, the Sienna SE ain't messing with me.
That car, is short and narrow. A true swagger wagon is big as a barrel.
MM - V6 in the front, stack wood in the back.  My drag racing stats says…I’m the mack.
Wife - I like to garden, so I need some supplies. Shop at Home Depot, it all fits in my ride.  On my way back, sing a song or two...get the kids ready, let's head to the zoo.
All - In my Mopar, In my Mopar, In my Mopar, not your ordinary car. (repeat)
MM - I love my daughters, they are number 1. Playing bee ball having lots of fun.
When play time's over we got work to do. I get my kids ready and tie their shoes.
Ashley - Daddy...I can tie my own shoe.
MM - Honor roll, students, isn't all that. Selling girl cookies at Wal-mart, Jack (shaking head no).  That's ain’t important, in my book (holding Rich Dad Poor Dad book). I'd rather my girls learn how to cook.
Ashley - I have a business, to pay for my toys. Collecting cans from the neighbors, forget those boys.  I work make some cash. (saluting) Thank you sir for all your trash.
Mom - My girls are smart, they understand. That school teaches you to work for the man.  And this is why, my family is smart. We drove Mopar from the very start.
All - We drive Mopar, We drive Mopar, We drive Mopar, not your ordinary car. (repeat)
MM - Dodge's lineup, is full of fun, Charger, Challenger, Viper hun.
Less expensive, than that foreign crap.  Forget gas mileage and that liberal smack.
In America, where freedom reigns. The Mopar family puts all others to shame.
MM - People come and people go…but only one man drove a Dodge Monaco.

Tuesday, June 19, 2012

Peanut Butter and Jelly

I remember growing up that peanut butter and jelly used to be a favorite of mine.  Today I went back to those roots and made myself a sandwich for lunch.  Mine you...the sandwich didn't last long sitting at my desk.  It was properly consumed using my 10 step approach by 9:30.  I also had about 5 free cookies that were brought in to work for everyone.  I is one of my many weaknesses.  Had I stayed in the military I probably would have been still in good shape.

So, I went out to lunch at Bd's Mongolian Grill with a couple of my coworkers.  For $5.99 plus tax and tip, it is hard to beat for all you can eat soup and salad.  I still am challenging my Dayton area readers to find a cheaper all you can eat restaurant.

I did feel bad about eating twice...although I didn't have breakfast.  I will need to start doing this.  I think it might help me with my eating problem.  When I was in the Army I always ate breakfast.  I suppose it was different back then, because breakfast was not all about eating.  It was about hanging out with friends as well.  I think it would be much more enjoyable if we did this more often.

As always, I'm thinking of ways to help you save and make money.  Today was no different.  The PB&J that I ate cost me about $0.40 to make.  However, I will reuse my plastic wrap to save an extra nickel.  I'll probably reuse it for at least a week.  I certainly have a ton of stored energy waiting to be utilized (stomach fat).  I will make an attempt to eat PB&J for a month.  Will I succeed?  Who knows...I just don't have the same willpower as I did 10 years ago.

One last tip...this one on making money.  While we were at Bd our waitress was obviously pregnant.  My coworker said he felt like she needed the extra cash.  This could be a gold mine for all you ladies who are waitresses.  Although it might be difficult to pull off.  Perhaps it would be an interesting experiment to find out if pregnant women get better or worse tips.  More importantly...whether or not pregnant women would have greater or lessor customer service problems.  I know for myself, I'd have a much harder time yelling at a pregnant lady.

Just a thought.

Monday, June 18, 2012

Tiger Woods loses - Stock Market Mixed

Tiger woods comes in 21st place in this past weekend's U.S. Open.  Why is this relevant?  It isn't.

Actually the reason why I am mentioning this is because last week my instructor told me that every time Tiger Woods won a major golf tournament the stock market rallied.  I apology to my readers who probably would have wanted this information prior to today.

Tiger woods however didn't it didn't matter.  In the class he mentioned that correlation does not necessarily imply causation.  You can Google what exactly that means.  The point is that many times people will come up with these theories of why something happens.  In the end it probably boiled down to chance and luck.  Many people will try and sell models on how to get rich in the stock market.  I've seen several of them.  Wade Cook had a model he was using that ran into difficulty.  Bernie Madoff had problems with his stock market model (because his model was a Ponzi Scheme).  I've used the Ron Groenke's stock market model.  His model was ok.  He wrote a book that I recommened reading "The Money Tree".

This book outlines in a useful story how stock options work, and how it can help increase your returns, and help lower your risk.  I do not agree with the entire approach, but it allowed me to learn about the potential, and research further.  As always I suggest you do the same.  Or you could continue to invest on whether the groundhog sees its shadow.

Saturday, June 16, 2012

Saving money - Do it yourself home repair

A few days ago I needed to change out the bathroom fan that was no longer operating.  I purchased the new fan and went to see if I could replace the old fan.  This is something that I have never done before.  However, by knowing your limitations you can at least see if it is possible to complete.

It was possible.  The fan box that I purchased was a direct fit.  All I needed to do was take out the old and put in the new.  The tenant was very happy...I was happy that I didn't have to pay someone $100 to install.  It took me one hour to complete.

Typically when I think about doing home repair or car repair, I look and see if I have the tools needed to do the job.  In the age of the can practically learn how to do anything by watching a video on YouTube.  Something I find fascinating is how many people look down on blue collar workers, but if something as simple as a light bulb burns out they call them right up to fix the problem.

I know a lot of people might say they do not have time to learn how fix things.  I'm just curious what you do have time for.  I can understand if you want to pay someone to fix a ceiling fan if you work 60-80 hour per week.  However, when you get home and spend an hour watching TV when you could be fixing the ceiling fan...seems like a waste of time to me.

The hardest part about doing home repairs or any repairs is troubleshooting the problem.  Fixing something is easy, troubleshooting is the hard part.  I'm certain you've all had an experience taking your car into a mechanic to fix the brakes, and the next thing you know the suspension is going bad, or if you fix the spark plugs, the fuel injectors aren't working right.  Many times fixing one problem can create another problem.  It can be very frustrating.  This doesn't mean you should give up however.  Given enough time, I'm certain that doing your own home remodel/repair will pay big dividends down the road.  At least they have for me.

Friday, June 15, 2012

Entertaining - a skill worth learning

One of my favorite singers of all time has to be the late Elvis Presley.  Elvis will always be a fan favorite.  There is a good reason why he was called the "King" because he practically invented cool, and made several amazing songs throughout his career. 

Elvis has to be one of the most impersonated music artists of all time.  In the post nuclear simulation Fallout: New Vegas the King was mentioned.  In the simulation was The King's School of Impersonation.  After the bombs went off, a local gang turned the place into a gang hideout.  Curious to see if something like this did exist.  I did a simple Google search and unfortunately the answer is no.  At least I didn't see it on the first page.

In previous articles I've written about how much it costs to be entertained.  That being said...there is plenty of money to be made entertaining others.  The entertainment industry is worth about $2 trillion!  That my friends is a lot of money available for entertainers.

I was talking to one of my co-workers and they were saying that they had a great business idea for me.  I could become a magician!  Apparently someone ordered a magician to her son's birthday party.  Cost?  $500!  They went on to saying that after I was done entertaining the kids, I could do all the taxes for the adults.  I thought it was a pretty good idea.  Since after a tax preparer/magician I could make your taxes disappear (after a small fee)!

Seriously...people want to be entertained.  If you can figure out a way to entertain people, the money can begin the flow.  Keep in mind...just like any skill you are developing it takes time, and usually money as well.  However, remember that if you do not enjoy entertaining probably won't be very successful.

Full disclosure not all tax preparers are magicians and cannot make your tax liability disappear.

Thursday, June 14, 2012

All you can eat buffet

Being a fan of food...I'm always looking for the best value when it comes to eating out.  Buffets are located all over the Dayton area.  Obviously where you live prices would be different.  If you aren't located around the Dayton area, let us know where your favorite buffet is and how much it costs.

If you are from the Dayton area...let us know what your favorite buffet is as well.

Yesterday I took some of our old neighbors out to eat.  They have been really great neighbors and I felt it was time to return the favor.  I told them to BD's Mongolian Grill at the Greene Shopping Center.  The atmosphere is great at that restaurant...although it does seem like there was an usually large percentage of people having a birthday.  I think there was 5 people who got a shout out for a birthday.

Anyways...since the meal was going to be around $100 I decided to have the salad bar.  The cost was $5.99 for unlimited soup and salad.  Pretty decent deal.  I went to Big Boy last week and paid $6.25 and if you go to Olive Garden many times you can get unlimited soup and salad for $6.99.

Big Boy ($6.25) had a wider selection of salad.  They had a fruit bar as well.  However, the soup was pretty salty.

Olive Garden ($6.99) has good soup, salad, and bread sticks.  The downside is getting service to order more soup.

Bd's ($5.99) had all the salad fixings I enjoy, plus mandarin oranges and pineapples.  The tomato soup was outstanding.  I cannot think of a cheaper and better buffet in the Dayton area.

If you do know of a buffet that is cheaper...please tell!  Otherwise, Bd' Mongolian Grill wins top honors from USA Military Millionaire.

Wednesday, June 13, 2012

Money saving skills

A widely known and easily learned skill that will help you for years to come is typing.  Learning how to type is a critical skill for many computer users (meaning practically everyone).  Computer and IT skills in general can save valuable time and energy.  Another quick way to become vastly more productive is to have two monitors for your computer.

Dual monitors has proven to boost productivity of people who use the computer a lot by up to 30%.  For less than $200 you could essentially work 2.4 hours less and get the same work done with two monitors.  How is this possible?  There are many reasons why...but if you think about it... you are increasing your desktop size by 100%.  If you could increase your office space by 100% wouldn't you be able to get more work done as well?  Same concept.

Is getting two monitors worth it?  YES!  Not only does it relieve stress (don't have to work as hard to get the same results), but productivity will obviously increase.  The same rule applies to those who know how to type.  Learn the skill!  I couldn't imagine not being able to type.  First of all, I wouldn't be writing this blog.  Second, you begin to hate documenting your work for your job.  Seeing people struggle to type is awful to watch.  As if they are trying to type something into a phone.

If you cannot type 45 wpm then you are wasting valuable time.  Most people who hunt and peck probably can only type around 20-25wpm.  This means you can double your productivity and reduce your frustration.

The other alternative is to hire someone to type for you.  Unfortunately at your do not have that luxury.  It is a real shame because I think some people could really become very productive if they had someone type and relieve certain administrative work.  I'm still trying to rope my wife into doing these things for me without any success.  Perhaps once my kids learn how to type I'll be able to accelerate my profitable work while allow them to perform all those mundane, but critical tasks.

Tuesday, June 12, 2012

Stock Advice - Macro vs. Micro

I'm off taking another great DAU course for my job.  The class I am taking is covering cost risk.  I got the chance much like very one else to introduce myself.  A chance to talk about myself and what I do for my job.  At the end you have the option to tell everyone something about yourself that interests you.  I told everyone that I wrote a financial blog.

After everyone was finished talking and introducing themselves...the instructor told me that he got out of the market and was waiting for a pullback to occur.  Basically wanted to know if what he did was a smart move.

In case you were wondering...I do have a crystal ball.  I'm not talking about the computer software program.  I'm talking about a real crystal ball.  I got it off a fancy chandelier.  So far, I haven't had time to use it. I've been too busy with other things.

I'll have to read my blog!  People laughed, and I had a couple people ask me how to get to this blog.  We have about 28 people in the class and I would guess that only one will visit which is around 3.5%.  That's right...out of 28 people 7% of the people are curious enough to ask wanting to learn more.  The rest of the people...aren't interested in learning about finance.

It's a real shame actually because you really need a mentor to help you out financially.  A stockbroker is not a mentor, and paying someone to mentor you seems wrong.  Although, people pay people vasts amounts of money to lose it...a different strategy might be in order.

Back to my question about whether I think the stock market will go up or down.  First of all, the question is a macro economics question.  Most companies follow the general direction of the economic.  This is true whether you purchase individual or buy an index fund.  Some companies obviously do better than other and some do worse.  I am not a big fan of looking at macro economy.  Measurement of GDP isn't very fascinating to me.  They can be misleading when it comes to buying stocks.  Stocks can be overpriced and could fall in price even if companies are producing better earnings.  This happens when investors pay too much for stock and earnings fall short of expectations.  Certain industries do better during different economic cycles.  Stocks can go down due to negative earnings for several quarters.  This happened during the great depression, and happens in most recessions.

However, with the stock market a simpler view is will their be more buyers than sellers.

The many books that I have read about Warren Buffett have him saying that he could care less about macro economics.

To get back to answering my instructor's question.  It sounds like a good idea for you.  Anytime you feel a sense of uncertainty when it comes to investing in stocks, more times that not it is better to get out.  Here is why...

More often than not...Stocks mover faster down then they move upwards.  We are moving into a great period of uncertainty.  With the upcoming elections it is anybody's guess how people will invest, and whether companies will be more profitable in the short term after the election.

If you look at the last 3 years the SPY (S&P 500 index fund) went from around $91 per share to $132.92 close today.  This is a 46% increase or 15% increase per year (not including dividends).  Most stock brokers tell investors that on average you'll only earn 8%.  This means that if you started investing 3 years ago in the SPY, you would be doing pretty well.  You can also look at the information at the SPDR website.

I recently heard today that a broker told someone that they would be earning 7% on their investment.  It appears to me that the amount of money you can earn in the stock market continues to decreases.  If you look at a country that also has historically low interest rates like Japan, you'll notice that the return on investment for their index is worse than the U.S.

Final thought...I still believe that the stock market the way most people invest is gambling.  If you like to roll the dice, or play blackjack without counting cards...go for it.  Just don't expect to win.  The best thing to do is get educated and make certain you can sleep well at night.  If you want to invest, look at investing locally.  Do your community a favor!

Monday, June 11, 2012

Health - 10 step starter plan to lose weight

Have you ever had something stolen from you?  That feeling of helplessness?  The feeling that you've been taken advantage of?

These are terrible feelings.  I experienced these each time I sat down and ate lunch.  Every time I ate lunch I'd look at my empty plate dumbfounded and angry.  Where did my food go?  Then I would ask my co-worker if they took my sandwich.

My co-worker gave me a suggestion that might just have changed my life forever.  Being a trained soldier, I'm very good at following directions.  He told me that I needed to stop feeding or grazing, and start enjoying my food.  He gave me the following directions, and I've created my 10 steps to turn your feeding back into eating.

Step 1 Cut sandwich in half
Step 2 Pick up sandwich
Step 3 Bite a fork size bite
Step 4 Put the sandwich down (very important!)
Step 5 Let go of the sandwich (It will still be there.  It won't get stolen)
Step 6 Chew
Step 7 Think about how much weight you will loser
Step 8 Think about how wonderful this meal is
Step 9 Swallow food
Step 10 Repeat steps 2-10

Seems simple enough, but this is revolutionary for me.  Much like a dog which doesn't really leave food in their mouth very long.  Something that you can give a dog is something like a dog bone or a pig ear.  They will chew on it for a long time.  You could do something similar, however I would suggest chewing on gum rather than a juicy pig ear.

Sunday, June 10, 2012

Cost of food

After my last article about losing seems appropriate to write about the cost of food.  Depending on what you buy or what you diet makeup can be pretty expensive.  Now that I have three children, I've noticed a significant increase in grocery expenses let alone the increase in several other areas as well.

Typically when I am about to write an article, I do a search to see what others are writing about.  I would hate to duplicate what someone else has already written.  However, I do like to share with others any articles that I found interesting, or to give myself more credibility.

I typed in what is the average cost of food.  The first item on the list was the USDA website.  It gives you the costs for children and people by gender.  It also breaks down costs per family of 2 and 4.  The site gives you weekly and monthly costs, and divides the costs by 4 categories ranging from Thrift to Liberal plans.

I haven't personally read the different plans, but if I was on the "Thrift" plan I would be spending the following per month for food.

2-3                 $100.40
4-5                 $104.20 (3.7% increase)
6-8                 $133.30 (27% increase)
Male 19-50    $180.20
Female 19-50 $160.10
Total              $678.20

The Liberal plan would cost almost double at $1,356.40

That is a lot of money for food.  This is about 15% of my total salary and would be about 31% under the Liberal plan.

This is a 44% increase from the year 2000.

I find this information interesting.  Food prices increase, but technology prices decrease.  The same 32" TV I purchased back in 2007 for $999 costs about $329 today.  The same ear of corn bought back in 2000 costs much more today.   Luxury items decrease in costs where as essentials increase.  According to the USDA the average U.S. consumer spent 9.8 percent of disposable personal income (income available after taxes) on all food in 2007.  I do not see how this is possible if you are using their 4 tier plans.  Something isn't right.  Perhaps one of my readers can figure this out.

Saturday, June 9, 2012

Feeding and eating until you're Skinny

I remember back when I was in the Army during basic training.  When it came time to eat chow, we didn't have very much time to eat.  Our drill sergeants would constantly remind us that we weren't eating, we were feeding.  I think this concept has gone with me through the rest of my life.  Good or bad, I am a fast eater.

Today was a very busy day for me.  I studied for my CPA, handed over the keys to my new tenant, talked to my old neighbor, cleaned up the rental house, had birthday cake for my mom, took mom out for her birthday, bought supplies for the rental, and took care of the little ones.

I finally found some time to write.  While I was out cleaning up some of the trees branches and limbs I cut down, our favorite neighbors of all time were outside.  They actually came over to my house and cut down the honeysuckle trees that were growing the the backyard of my house.  That is right...they took care of a very evasive plant on my property, because they are just that...great neighbors.  This isn't the first time they have helped maintain my rental house yard.  They reseeded a large area, called us when water was gushing out of the garage during the winter because a pipe broke.  If their was an award for best neighbor for the year.  It would be them.  In fact, I'd go as far to say that if people were more like them, we truly could have heaven in a place like Earth.

The neighbor also lost a lot of weight...about 20 pounds.  He said he's co-workers were impressed and asked what his secret was.  He said he ate less.  Gee...they were hoping for something a little easier.

This is where my "Feeding and Eating until you are Skinny" book comes in.  Most people want to lose weight, and everyone should know that if you consume less, you will lose weight.  However, it isn't easy...because like myself, I have an oral fixation that needs to be filled.  How can you solve it?  Two ways...chewing gum, and eating celery.  You can eat yourself into oblivion if you ate nothing, but celery.  Although you'd probably have serious diarrhea.

I'm old school, and I believe in the philosophy of no pain, no gain.  If you feel pain, at least you know you are still alive.  Feel free to ask questions by writing your comments below.  Good luck with your weight loss.

Friday, June 8, 2012

Tenant Turnover

Anytime a tenant leave it costs the landlord time and money.  From my experience, tenants typically have left the place much worse than when I turned the place over to them.  However, this time was different.  This time the tenant left the place better than when I turned it over to them.

How?  Well, with the exception of not mopping the floors, the tenant installed a chain link fence for the yard.  The yard was freshly cut before he left, and maintained the yard well.  The bathrooms looked great!  No junk left in the fridge.  No mess in the oven.

They didn't give me a 30 day notice of when they were leaving until it was less than 30 days.  However, I managed to get a tenant to move in only 3 days after they left.  This will save them over $300.  Plus because they cleaned the house so only a small portion of the deposit will be used.  They had 2 dogs, and will get back their pet deposit.  Most landlords have a nonrefundable policy for pets.

As a landlord, the goal is to be fair.  You don't have to be nice, but at least be reasonable.  People can work with reasonable.  I also believe in karma.  What comes around, goes around.

Thursday, June 7, 2012

Gut Feeling

Do you have gut feelings?  Not everyone experiences such things.  Basically it is your intuition telling you that something is or isn't right.  If you have taken the Myer Briggs personality test you might understand what intuition is a little better.  However, many people do not have the same levels of intuition as others.  As for me...I have the ability.  But what exactly is it really?

Well, for me...sometimes I cannot explain myself very well in words.  It can drive analytical people up the wall, because I see or feel things that they could only dream about.  I'm not talking about ghosts, aliens or x-ray vision superpowers (it would be nice though).  What intuition to me is all the experiences and analysis that I have completed and balls up into your gut.  The feeling is real, and it typically is important to pay attention to it.  Can I explain my thoughts on why I feel the way I do...yes!  However, typically it is already too late.

Recently I had this feeling screening one of the potential tenants.  One of my tenants is moving out, and the not very fun process of replacement is taking place.  The third potential tenant I started to get a gut feeling.  Fortunately they weren't interested.

When it comes to personality traits, some people have abilities that you cannot possibility fathom.  Why?  Because not everyone was built that way.  I'm certain that some people probably think that the dog whisper or psychics are total fraud.  I do not believe they are fraud.  We have a very limited understanding of our true nature and abilities.  Some people are able to develop abilities that they may have.  There are always extremes to certain parts of many different spectrum.  The movie "Unbreakable" talked about how some people are born extremely frail, while others are practically unbreakable.

Some people can see even see the future.  It is possible.  I haven't told very many people about it, but I have been able to do it on a rare occasion.  I haven't sought out to develop the skill for several reasons.  First of all, typically the amount of time in the future is very limited (less than 1 minute).  Second, I am doing many other things in my spare time.  Third, it can be very upsetting and frustrating.  What do I mean?

Have you ever watched someone get beat up or injured, and you did nothing?  You practically froze, and couldn't react?  Imagine how that feels if you could prevent something, and were able to do something about it, but reacted too slow.  It can get annoying real quick.  The skill is worthless in that sense because you cannot use it.  Watching something happen before it happens isn't cool.  I do not like Déjà vu.

Sometimes things just cannot be explained, but this doesn't mean their isn't an explanation.  Perhaps one day I'll fully understand intuition.  Until then...I'll just continue to write in this blog, and study for my CPA exam.

Wednesday, June 6, 2012

Saving vs. Borrowing for purchases

Whenever I want to make a purchase for something we need we always save up for these items before we buy.  For example...borrowing money to buy a TV is a huge mistake.  One reason why it is mistake is because the TV is a huge time waster.  Number two the TV isn’t worth nearly as much as soon as you bring it home.  Number three the TV might end up costing you double over the life of the TV.   

Borrowing at high interest rates is a huge mistake.  Why borrow paying 21% interest when you can save earning 1% interest?  Let’s do the math.
$1,000 TV @ 21% interest
= $210
This is only if you pay it off in the first year! 
Option two.  Save $100 per month where the interest earns you 1%

Using a calculator you can find out that you will earn $6.52 in one year.
Now you have in one year $1,200 + $6.52 = $1,206.52 – 1000 = $206.52 left over.

If you are able to save money for your GI Bill costing you $100 per month for 12 months then no reason why you couldn’t do the same for a TV or any other large purchase.  Remember, that TV has operating and support costs.  Cable TV is very expensive sometimes costing you $100 per month.  Let’s do the math.  Say you watch TV 10 hours a week or 40 hours a month.  You are spending $100/40 = $2.50 per hour to watch TV.  Movies is much worse…some movies cost like $10 per person.  If the movie is 2 hours long you are spending $5 per hour of entertainment per person.

How you spend your time is the difference between someone who will become wealthy or not.  Wealthy people spend a lot of their “free” time working.  Many wealthy people who work in their spare time love it.  Find something that you love to do in your free time that makes you money is the recipe for financial success.

Tuesday, June 5, 2012

Mortgages vs Rent

I’m 33 years old now and I’ve lived in five different homes that I purchased.  I started off living in a trailer that I bought for $5,000 when I was in the Army.  After the Army I purchased a condo right next to a supermarket and Wright State University where I went to school.  It was a great way to start our life outside of the military.  After college we purchased a larger home.  It is a 3 bedroom 2 bath home that I am renting out now.  I then purchased a house in Kentucky when I was a stock broker for Fidelity.  I lost about $15,000 after I got a new job back where I just left.  I am now living in my current home that I purchased close to my workplace. We have lived here for just over three years now.

Probably the biggest mistakes we made was when we bought houses.  I feel we messed up twofold.  A good rule of thumb is to not pay more than 2x your gross salary or income.  I failed in doing this for the condo and rental home (I should have rented).  I did get lucky buying and selling the condo.  Secondly, always get a mortgage with 15 or less years.  Lastly which we did is put down at least 20%. If you cannot do this, then you are better off renting, or finding a smaller home. My advice would be to get a smaller home that has the potential to be a great rental house. When you are ready to upgrade to a bigger place, then you rent out your old home.

Many times it is much more beneficial to rent than buy. For example my rental that I used to live in I bought for $140,000 and put $15,000 worth of upgrades. The house is currently being rented for $1,110. If you thought about purchasing this house with what I did and only put 3% down you might be looking at a monthly payment of $1,328.8 per month including mortgage, taxes, insurance, and maintenance. This renter is getting a lot of house for the amount they are paying.

Another advantage of renting is you have no debt, you are more flexible if you need to move.  Breaking a lease is easy if you are in the military.  If you get PCS orders, you give your orders to the landlord and off you go.  There are limited tax benefits contrary to popular believe when it comes to buying a house.  Unless you break all the rules I described about.  Buying a $300,000 house, putting 3% down, paying points, PMI, mortgage interest, and property tax.  Then you'll get a tax break.  It also can break your bank account.  Your goal shouldn’t be to get yourself into this kind of debt and convince yourself that you are smart because you are saving on some taxes.  There are much better ways to do that.  Besides…if you read my article who are you trying to impress, you should know that this is a big mistake. Thieves loves newer houses, and target them all the time.  Check the number of thefts in the neighborhood you are looking to buy or rent. You might be surprised!

Monday, June 4, 2012

Do you need millions to retire? Ask Jesus.

I recently read an article from The Simple Dollar.

The author wrote that as an example $750,000 would be a good amount for retirement at 60.  I am not saying that $750,000 is not enough or too much, but most people have been marketed the idea that you need millions to retire.  If you read my lasts blog…”How much money do you have.” You can start to understand percentages and how much money you may need based on your investment knowledge, experience, and luck.  

In 2008 I worked for Fidelity Investments as a stock broker they taught to that the average person who owns a 401k or other type of contribution plan has around 50k.  It looks like now the number has climbed up to about $69,000.

The Washington Post covers an article saying basically the same thing.  Here is a guy saying that you might need $750,000 to retire, the comments say it is too low, but reality is most people have around $50,000.  The article goes onto saying that workers in Fidelity 401(k) plans who routinely set aside money from their paychecks with the same employer for at least 10 years had amassed an average $179,100 by the end of 2011.  In today's low interest environment, most people wouldn't be able to retire with this kind of money off the interest only.

If you are a retiree typically people feel that you shouldn't dip into the principle you saved.  If you do this how much money would each of these investments make? 

$750,000 vs. $50,000 showdown!

If you are someone that doesn’t understand investments very well you might decide putting all the money into a one year CD.  A year CD is earning about 1%.  This means you would earn the following:
$750,000 @ 1% = $7,500 and on $50,000 @ 1%     = $500 for the year.
Taxes @ 15%    = $1,125 and                                   = $75
Total                  = $6,375                                          = $425

Wow, taxes sure ate up a lot of your return!  One of my favorite authors Robert Kiosaki says that the easiest way to save money is to reduce your tax burden.  Let’s do just that.  Instead of a 1% CD let’s put it in a Tax-Free Money Market that earns .1% less.
$750,000 @ 0.9%              = $6,750 and $50,000 @ 0.9%  = $450 for the year.
Taxes @ 15%                    = $0 and                                     = $0
Total                                  = $6,750                                     = $450
Increase of                         = $375                                        = $25
Percentage increase           = 5.8%                                        = 5.8%

Can you live off of these returns?  Probably not.

What if you could bring in investment returns like legendary investors Warren Buffett, Peter Lynch, George Soros, Donald Trump, or Jim Rogers?  Some of these investors managed to create returns of 25% per year.  Let’s do the math.
$750,000 @ 25% = $187,500 and $50,000 @ 25%  = $12,500 for the year.
Taxes @ 35%      = $28,175 and Taxes @ 15%        = $1,875
Total                    = $ 159,325                                   = $10,625
Percentage difference from 0.9% 
increase               = 2360%                                        = 2361%

Could you live off of this money?  People do this all the time.  People live off of both amounts.  In fact, the amount you pay in taxes on the $750,000 is more than some of your current salaries.  My point is that how much you have for retirement isn’t the question…you should be asking what kind of return can I get off my money.  The person with $50,000 earning 25% is financially making almost twice the amount than someone with $750,000 earning 1%.

Earning 25% per year isn't the hard part.  The hard part would be getting a 25% return in cash.  Many investments that earn this kind of return requires you to reinvest back into the business.

In the Bible Jesus talks about a parable of the three servants each given a certain amount of money.  One servant receives 5 talents, one 2 talents, and a third servant receives 1 talent.  It doesn’t talk about ages or investment/business experience.  However, obviously the master felt that one servant was more responsible or had more ability than the other two. 

This is no different than real life.  As you acquire more wealth, the management of this wealth become more difficult.  You begin to require other people to begin to help with managing of your wealth.  People like accountants, bookkeepers, and lawyers to name a few.  Your knowledge on finance needs to increase as your paycheck and investments increase.

But his lord answered him, "You wicked and slothful servant. You knew that I reap where I didn't sow, and gather where I didn't scatter. You ought therefore to have deposited my money with the bankers, and at my coming I should have received back my own with interest. Take away therefore the talent from him, and give it to him who has the ten talents. For to everyone who has will be given, and he will have abundance, but from him who doesn't have, even that which he has will be taken away. Throw out the unprofitable servant into the outer darkness, where there will be weeping and gnashing of teeth." - Matthew 25:24-30, World English Bible.

If you don't understand what this means...I'll explain to you.  DO NOT BE IGNORANT ABOUT MONEY!  Otherwise someone will take it away from you and give it to someone who has money.  This pretty much happens everyday.

Sometimes you can’t see the forest for the trees.  Look at the big picture…if someone says you cannot do something, it really means they cannot do it.  Their word doesn’t mean that it cannot be done.  The Wright Brothers were told they couldn’t fly…it can be fun to prove people wrong.  Just don’t go around telling them I told you so.

Sunday, June 3, 2012

100 Articles!

With this post, yet another milestone has been reached!  This is my 100th article written for this blog.  If I was as popular as Opera, I'd probably give away a free car...or perhaps send everyone who is a subscriber a free gift certificate. 

Unfortunately for those reading, I'm not as popular as Opera.  Thus no give away will take place.  On a brighter note, I'm still writing and have been able to post an article pretty much everyday.

As I delve deeper into my study to becoming a CPA has gotten increasingly more stressful.  I am thankful that I have a good support network.  The people in my life have helped me improve in many different areas.  I'm thankful to all of them.

We have so much to be thankful for living in America.  This is a great time to be alive!

Saturday, June 2, 2012

More Taxes – More problems

Taxes are your number one or number two expense typically. Whether you realized this before or not…it is true.  Hate paying so much for rent?  Taxes are a large reason why you pay high rent. Sometimes over 20% of your rent is going toward paying the property tax for the landlord.  Insurance is another large ticket item that costs the landlord money.  If it costs the landlord money, it costs the tenant money.

If you own a home, the same rule applies. The difference is that landlords get to write off expenses and most home owners cannot.  Gas has fixed taxes which increase and decrease percentage wise based on how much the fuel costs on any given day.

Almost everything you buy with cash has been taxed...sometimes multiple times like cars.  Any items you buy have corporate taxes that are imbedded in the products being sold.

Something that I am surprised is the lack of knowledge on taxes. Too much noise exists when it could be really simple. One quick tips has been written talking about this great benefit to military personal.

Basically it has to do with saving receipts. Many people live in states that do not have income tax. If you are someone who itemizes their tax return you can take either income tax, or general sales tax off on your Schedule A itemization.

Being organized helps in other areas as well such as budgeting, coming up with a savings or investment plan…and finally a finance plan with forecasts on how to become a military millionaire.

For me...a penny saved is a penny that isn’t taxed.

Remember you have 3 years typically to get some more money if you or someone missed a deduction on your taxes.  Corporations make changes to their financial statements all the time.  This is normal.  It is always good to take a look and see if you missed something.  It has happened to me.  The good news is that if you do miss something and IRS cuts you a check...sometimes you get interest on top of it.

If you have questions or need help?  Comment on your problem, and I’ll take a look.

Friday, June 1, 2012

Silence by Acceptance

I've been writing this blog for over two months now.  I haven't received as many comments as I would have hoped.  Some sites receive many bizarre comments, and it feels like some people would comment on almost anything.

Either everything I write people agree with or I'm getting a lot of spam visitors.  I'd hate to believe that people could possibly agree with everything I write.  Typically at my workplace, I try and vent all of my nonsensical thoughts to them.

This doesn't always work.  If you read any of the past articles and wish to comment on them...feel free to do this.  I have responded to pretty much everyone who has commented on this site.

So, start writing!  Break the silence!