Monthly Archives: May 2012
I don’t talk much about investing in equities, and for good reason. I don’t think I should be investing when I am in debt. I contribute to my retirement account and savings account with every dollar I make, but I am not spending much time these days thinking about investments. Personally, I prefer small business and real estate investments, and stock investing requires time and a sophisticated understanding of the industry you invest in. Put simply, you better know your sh*t! I’m OK with not investing, knowing that my debt balances are going down and my savings is growing (slowly of course). Which got me to thinking about tech stocks. Tech stocks are always in the news. Sure, right now it’s Facebook and its inevitable underperformance, but before that it was Groupon, and LinkedIn, and Microsoft and Baidu and Zynga and Yahoo! and eBay and Amazon…you get the point. Remember how I lost a lot of money in options? Well, that was a tech stock. I took advantage of that stock’s volatility for two years profitably, but in the end, I got hosed because it wasn’t my investing strategy I was using, but someone else’s. I learned a great lesson about investing (develop your own strategy), but I also became much more wary of the tech industry.
Many great investors specifically stay away from tech stocks. The industry changes rapidly and competition is fierce, including shameless copycats. Users are fickle, servers crash and you’re one animated GIF away from becoming a sad internet joke. That’s an exaggeration but it’s not a grand one either. On the other hand, companies like Youtube and Instagram are companies without many major physical assets but who were nonetheless acquired for $1.65 Billion and $1 Billion, respectively. Think about that. I think it’s important for people from all walks of life to grasp that concept: the amazing thing about the tech industry is the value which its major players put on a product or service that has a large number of users with a strong loyalty record. Instagram is not making money…yet. But it has 30 million users (and growing) who might be willing to sit through an ad the next time they log in to the app. Which brings me to my next point: the world’s largest technology company, Google, and most other web-based or mobile tech companies make their money from advertising. Does this blow your mind? It blows my mind! Here is a product as amazing as Google, one that has infiltrated millions if not billions of people’s lives, it has changed the way our mind processes information, the way we think and it has made me an information and media addict, and it derives the majority of its revenues from advertising! Unlike TV or movies, there are no subscription fees or box-office revenues.They don’t charge for 99% of their products and services. Just ads. Just other companies paying Google to allow them to place ads all over everything and all over our minds. What can we take from all of that? That providing businesses with a service that you can do better than they can (Google is better at getting their ads out to more viewers) can be 1000x more valuable than the products of the business itself! Crazy right? While it’s exciting for Google and other big players, an entire industry dependent on advertising revenue seems extremely volatile and we have seen tech stocks rise and fall sharply since they began dominating NASDAQ in the late 1990s. Companies can fold or fade easily in any industry, but it seems like the sheer volume of tech companies makes it all the more dramatic.
Of course, internet and web-based companies are not the only types of companies that are tech.
Tech Industry Includes All Kinds of Companies
There are software companies (Microsoft), e-commerce companies or e-tailers (Amazon), hardware companies (ASUS), WiFi/connectivity companies, SaaS (Software as a Service like Salesforce) and cloud computing services and so many more that don’t get as much airplay like financial technology (like payment processors), medical technology and building and engineering technology. Lots of these companies have tons of physical assets, are sitting on cold hard cash (last I checked Yahoo! had about $3 billion in cash) and have weathered several economic storms. So there are plenty of companies that could be values for an investor, but they are probably not going to be the hyped-up IPOs.
I love the technology industry and like to stay somewhat informed of the news and trends in this market, but I am not about to buy any more tech stocks. I am not a full-time or active investor at all, and investing in tech stocks without a deep understanding of the company, the management and the next big move the company needs to make is straight GAMBLING. You wouldn’t invest in a shady MLM company when your financial situation is rough, why should you take a similar risk with investing in a tech company you know little about?
One of the hardest things about changing your financial situation (from really crappy to pretty good) is getting the big picture of financial matters. Sometimes, when we are tight on money, we hear anecdotal evidence that could tempt us to take big risks. “Lady Godiva bought Apple stock when it was $92 and now it’s almost $600!” or “Jamie’s brother is buying a ton of foreclosed houses and flipping them for profit!” Anecdotal. Anecdotal. Anecdotal! It’s one instance. What worked for someone else in the past may not neccesarily work for you. I try not to compare myself to others anymore. Consider the same advice in your investing and financial life. So even though I like the technology industry and its services and products and breakneck speed, I don’t have any plans to invest in it. Unless someone has the next Instagram and wants to offer a very small angel investor a 10% stake. I wouldn’t turn that down.
What about you? Do you have preferred industries you invest in? Others you steer clear of? Where have you had your best returns? Secret tip-sharing encouraged.
Yesterday I took a last minute business trip out to Charlotte. I arranged the travel myself since it was so last minute and the easiest way to do it was the all-in-one option at Expedia. When I got to the Dollar Rent a Car, the lady at the desk told me to “have my pick” of any car in the last row of cars. Thanks, nice lady! I said and I was out the door. When I got to the last row of cars, I found out I had just two options:
1) Baby blue Mercury Grand Marquis
2) Dusty gold Ford Crown Victoria
Alone in an airport parking lot in Charlotte, I had a long, hearty laugh. I just kept looking at both of the cars and laughing and laughing. I took off my backpack and put my hands on my knees and kept laughing. I finally got my breath back and knew I had to pick one, but it was really no contest: Crown Vic all the way! The Crown Victoria and Grand Marquis are essentially the same car, but I like Crown Vics better. There’s a lot of history there. I pulled up to the checkout booth and that lady had her own laugh as she told me:
Her: “Look! You didn’t even get the whole car around the curb! Haha!”
Me: “I know, I’m driving a cop car!”
Her: “Nah, our cops drive Chevy Luminas. This right here is Beverly Hills Cop-era.”
But once she got all her laughs out about the bench seats and other oddities and I was out on Wilkinson Road, I got quiet pretty fast. The car drives like a dream! They don’t have V8 engines for nothing. It was a smooth ride and I felt like I was in a yacht. Land Yacht. And 5 minutes later, it started pouring. On the highway heading into downtown (or is it uptown?) I was caught in a sudden, torrential downpour and I was so thankful to be in the Crown Vic. She handled herself just fine. I realized how silly it is to be embarrassed by a car, especially one as useful as a Crown Victoria, the model that’s served many a police department, taxi company, public school or thousands of other organizations. Really, what do we know about style? If a magazine says it’s cool, do we really believe it? Or do we just accept it? Do you need Pauly D or Pitbull to tell you a Crown Vic is cool or can you just see it for yourself? I’d like to think I can define my own style.
So if it’s time to buy a car and you want to save money but don’t see how since you don’t have $12,000 saved for a nice used Corolla, consider these reasons to buy a Crown Victoria:
- Crown Victorias can be purchased at a bargain at police and vehicle auctions. Auctions take place in most cities and towns on a weekly or monthly basis. Most require payment right away, but you can also buy a car for $1,000 or less. Sweet!
- Some of them used to be cop cars. You can really freak people out by driving up behind them really slowly and tailing them for a while.
- Roomier than most college dorm rooms. Compared to my compact car, you can comfortably seat 5 in there, and 6 if you want to take advantage of the bench seating up front. And imagine how much junk food you and your friends can stash in there!
- *BONUS* It’s a buyer’s market in the used Crown Victoria world. I know, we all hear it’s a buyer’s market in real estate and Blinkin has some bad news for us about the reality of that buyer’s market, but not so here! Listed for $2,800? Offer the guy $1,400 and you probably got a deal. I think there was some kind of accidental surplus of production from 1995-2011 (check out this nostalgic article about the last one ever produced) and so it’s always easy to find one for sale.
In short, Crown Vic’s are rugged, last forever and are comfortable. They do get pretty low gas mileage (but no worse than any F-150). I’m glad I got to drive that Crown Vic, it was a much-needed reminder of staying humble and not living to impress people. I do what I want!
What about you, would you drive a Crown Vic or any other manner of unexpected car? What’s your preferred big American sedan?
Warning! Sentimental/gooey post ahead.
I just read Andrea’s exciting and inspiring post on discovering what she loves. I am so happy for her! I love seeing breakthrough posts that tell me life is always changing, and you are a big part of how your life can change. I think if there is one thing I have discovered as I approach one year of blogging is that life ain’t easy.
It ain’t easy to write consistently. It ain’t easy to pay off debt without occasionally getting derailed or frustrated. It ain’t easy to push yourself to be better when things seem good enough, even though you know you want better. Hell, it ain’t easy to make more money, start a business, wake up early, get fit, stay healthy, keep your relationships strong and happy, stop complaining, help other people, learn new things regularly or pretty much do any of the things you want to do in life.
It’s a fact of life: Life is hard! Not only that, life is always changing. Always. Things don’t stay the same. Neither do the balances of your assets and liabilities, the way you feel about people, your job, even your favorite food. I used to think that changes like that are necessarily sad. From the outside, every divorce seems like a tragedy. But if two people have grown apart and are happier discovering themselves on their own, who am I to say what is best for those people? Of course I don’t want to ever get divorced (if I get married), but how can we know how we will change 25 years from now? We can only do what we can in the present with love and awareness and the future will take its course.
So while I am nowhere close to enlightenment, or even total awareness in my life, I do try to incorporate a little bit of it into everyday. Because in general, I am one of those happy people. My brother once said to me, in a kind of wonder, “You’re just one of those people who wakes up in the morning, and you’re happy to be alive!” I still think it was one of the best compliments I’ve ever gotten. And it’s true! I am happy in my heart and I always have been. Life has been stressful in the last couple years, but I don’t want that happiness to go away. I’ve let my feelings get the better of me lately (more than I’d like to admit) and it doesn’t have to be that way. Life can be hard but I can still be happy. I have debt (dumb debt that is my own fault) but I can still be happy. I can work every single day and I can definitely still be happy (I’ve been loving working). I can want to make it big (or as I’ve been thinking of it, get rich or die tryin’) but I can still enjoy what each day has to offer.
With that, I’d like to share three books that I have found to be inspiring. The first two I’ve mentioned before and the last one is a new discovery. The common trait between these three books is that I laughed, pointed and judged a book by its cover for a long time before sitting down to read each these books. There is a lot of self-help garbage literature in the world and it’s easy to mock the genre. Too easy! Look at those titles! And don’t get me started on Suzanne Somers or Kevin Trudeau! But these books, even the ones that I think are junk, have helped a lot of people grow and view their lives differently. If a book can help you or move you to change some aspect of your life, then it has accomplished its mission. So I hope you will take the time to check out these three favorites of mine:
Wherever You Go, There You Are by Jon “The first rule of meditation is you don’t talk about meditation” Kabat-Zinn
Finding Your Strength in Difficult Times by David Viscott “Education doesn’t make you happy. Success doesn’t make you kind. Poverty doesn’t make you wise. Riches don’t make you full. Experience doesn’t make you smart. But love can teach you everything.”
Don’t Sweat the Small Stuff–and it’s all small stuff by Richard Carlson “Trusting your intuitive heart means listening to and trusting that quiet inner voice that knows what is you need to do, what actions need to be taken, or changes need to be made in your life. Many of us dont listen to our intuitive heart, for fear that we couldn’t possibly know something without thinking it through, or for fear that legitimate answers could possibly be so obvious.”
Well, that’s my weekend inspiration for you. I know you get frustrated because life is hard, believe me, it’s hard for me too. It’s hard for everyone. But it’s also life. It’s all we have. It will be over before you know it. And at the end of the day, I am grateful I can still wake up in the morning and feel happy to be alive
Have a great weekend and go do something fun and cheap!
One of the problems with having a blog is that there is a record of promises I have made to myself. No longer is it just in my head where it will go away and I can go back to binge-television watching and eating Choco Tacos while sprawled on the couch. Damn it! Anyways, this month’s debt update met the goal from last month:
Smallest Debt (April 2012): $4,343
Smallest Debt (May 2012): $4,269
Next month will be better, I know this.
Total Debt Update:
May 2012: $32,183
% Change from April: 2.1% Decrease
The monthly goal was to be under $32,200, which I just barely met. I also made a goal to increase my income. First, I got a raise at work which is backdated to February (the backpay will be a nice little chunk to pay towards my Discover card). I immediately increased my savings rate and retirement contribution rate which I had been waiting to do as soon as my raise was implemented. I’ve also been doing some side work since the last week of March. It’s a pretty cool chance to work with a very successful business and get paid along the way. My eBay side business is also generating around $200-$250 monthly. So while these two side ventures aren’t earning a ton more income for me, they both have the potential to continue to grow, with the same level of effort from me, to much more. So I’ll continue to work on these side efforts, but I am also enjoying work more as I have a lot of new responsibilities and a chance to learn a lot more. So what’s the goal for June’s update? Under $31,000 in debt and to continue to be diligent at work and on my side work. Sometimes I feel exhausted because I am putting at least 60 hours a week into everything. But I know it’s not a lot in the grand scheme of things. I still have time for dinner every night, time to read and time to hang out with my friends and family. I’m not writing as much as I want to be nor exercising but that is my own doing, which brings me to part two of this post:
2012 Goals Check In
Whew! What a farce! I totally just wrote my goals back in December and then told them “See you bastards in hell!” and didn’t give them a thought since. We’re getting close to mid-2012, so I want to check in on these goals and see what needs to be adjusted to meet as many as I can.
- Develop my relationships and spend time with the people I love. Always!
- Reduce waste: Energy, water, food, consumer items and paper goods. Yes on all of them except water. I’m not making a conscious effort to use less water what with the 2-3 showers a day I take and the garden hose I like to leave running all day to provide “soothing water sounds” (mostly kidding). But I hardly ever let food go to waste now, and am much more conservative in all the other categories too.
- Get to know more people in LA and elsewhere. Yes. Meeting lots of new people through work, blogging and looking for side work. It’s been very fun and I’ve surprised myself at how non-anti-social (that’s not a word) I can be.
- Pay off $20,000 in debt to bring my debt total to under $15,000. Remains to be seen. I’ll be very happy with under $20,000.
- Wake up 1 hour before I have to get ready for work, Monday through Thursday and write, do errands or work out. Not doing this at all. Going to re-implement for at least once a week.
- Exercise 6 days a week. Not at all. Around 2-3/week. Now pushing back to 4.
- Successfully complete the Yakezie challenge. This should be doable! I need to read more blogs who are new to Yakezie and provide whatever support I can.
- Develop American Debt Project and my two other online properties into income-generating websites. Yes, but not a lot. The other two have been completely neglected. I plan to revive them towards the end of the summer.
- Buy my first place. Only if I have the down payment and the slush fund. More concerned about making the right choice instead of just doing it for the sake of doing it!
- Contribute 10% of everything I make to savings. Totally embracing this! It’s really easy to save a portion of my side income because I treat it as found money, so I don’t mind parting with it.
- Start an herb garden in the patio! Too busy for this right now. Might enlist my mom to help make it happen.
- Become a better photographer. Nothing’s happening….
- Writing goals: Submit to Thought Catalog, brainstorm/start book ideas. I’m over Thought Catalog, but I still need to write non-blog stuff to stay sane. This is also at an impasse.
- Make at least $5,000 in writing/freelance income. None of it is writing income, but I think I can definitely hit the $5,000 mark.
- Create monthly goals for each month, which I will announce on my blog. I love doing this one! The monthly goals keep me on track and I am going to switch it up a little for June. So here’s to the June update being under $31,000!