CK Blog

I happened to catch a commerical for Robert Kiyosaki’s workshop where he so nicely informs people that saving money is for “losers” complete with the L shaped on his forehead. Instead of getting into all the issues and criticisms about the Rich Dad, I wanted to mention one thing I noticed. In the fine print, it says that *Robert Kiyosaki does not participate in these events”, so you sign up expecting to learn something from him and instead get an employee (sorry, they like the term “partner” better)pushing you to sign up for other more expensive seminars. At least you’re supposed to get a free gift for staying till the end. That’s something right?

Sitting at home in your pajamas with a nice cup of coffee at your side typing away at your keyboard sounds like a pretty good living for a lot of people. There is no boss staring at you, no traffic to fight in the morning, just you and a broadband connection as a way to make a living. While this is a goal for many people, achieving that goal can be harder in reality than the theory suggests.

I came across Associated Content recently as one way of making a few extra bucks online. The basic idea is that you write an article, submit it to them and they make a payment offer to you for the rights to publish that article. If you choose to offer to them as an exclusive, there is a higher potential payment, but you also cannot republish the article anywhere else nor remove it from their site in the future. If your article gets popular, you can also make money from Performance Payments, where they pay you based on the number of views that your article gets.

How much can you make from Associated Content though? Chris Bibey shared his results from publishing articles on Associated Content and showed an average payment of $6.46 per article during a month of writing. Depending on how fast you can write a quality article, that may be worthwhile or not. If you can write 5 articles an hour like Chris, it can add up to a decent hourly wage, but if its taking you a long time to finish even one or two articles, you average wage starts making working at McDonald’s look better in comparison.

What if you wanted to make writing your full time income source though? Let us say you had a goal of making $2100 a month, which would equate to $25,200 a year. That is not a huge number by most standards in the United States, but some places that would sound good.

Therefore, $2100 goal / $6.46 per article equal 325 articles in a month. Yikes, that is a lot of writing!
Assuming 30 days in a month on average, 325 articles divided by 30 days is roughly 11 articles per day with no days off. If you wanted weekends off, such as July, you would have 24 days or 13.5 articles per day. If you wanted to work a 8 hour day, you would need to average 1.35 articles in the 30 day example or 1.7 articles per hour in the 24 day month example. Going back to Chris’s example, if you could write 5 articles an hour you could easily surpass these goals in less time than the examples.

The trouble with this idea though would be burnout. Could you really develop ideas for 325 articles that Associated Content is willing to pay for? Could you make yourself sit down and write all that material? Then the question would become what about next month? Could you do it all over again? This example would equate to around 3900 article per year, which is a lot of writing for $25,200 per year if you followed the example rates here. This example also did not take into account any taxes, which could easily take 25 to 30% of your pay since would be self-employed, so you would have to earn that much more to cover your taxes if the $25,200 were your income goal. Of course, if you were good enough to write that many articles, chances are you would have found better paying sources or alternative income methods along the way. If nothing else, you might have developed a blog instead where you can fully benefit from the advertising revenue that the traffic for your articles would generate along with other monetizing possibilities such as affiliate marketing.

Consequently, this idea might not work as a full time income source, but it could help lead you to other clients in the future. It could also serve as a nice way of making a few extra bucks to add to your income. If you wrote for 1 hour, a week even or 20 articles a month, which could be an extra $130 in your pocket. I did sign up for Associated Content to check them out and will give it a shot to see what happens. I’ll be the first to admit that seeing the latest income reportfrom Chris made me a little wishful for that type of success that he has reached, but I know it is a matter of doing the hard work and marketing that can eventually lead to those types of numbers.

I have discoved a true measure of denial. I was paying bills tonight and decided I better update my Quicken accounts. It turns out the last time I updated most of them was the middle of March. I used to be really good about keeping them up, but between Yodlee and burying my head in the sand, I have fallen off the wagon a bit.

Now I’m just a bit more bummed out now than I was before I calcuated out my updated (non-existent) net worth. But at least my Quicken is updated right?

I checked my 401K online and so far this year, I am down 10.7%! Yikes! What is really killing me is the company stock that they provide as my match, which is now down over 63%. I usually move everything out of it during my rebalancing, but it still builds up. My other funds are International down 5.8%, Institutional Index down 4.6%, Large Cap Growth down 0.2% and Intermediate Term Bond is up1.3%.

I did give some thought to stopping my 401K for the moment to have some extra money to build my emergency fund and pay off some stuff, but hated the thought of missing the match and so forth. I know some people would just consider not doing the 401k unthinkable, and part of me agrees, but in certain cases I think you can justify it.

Checking my email tonight includes a “Important Service Notice” from Peerflix letting me know that they are discontinuing their Marketplace and DVD buy/sell/trade aspects of their website. Peerflix had been a website where you could list DVD’s that you owned for trade with others. If you were buying, you would pay a small transaction fee and the marketplace price set by Peerflix. If you were selling, you could sell for the marketplace price with the postage paid by the buyer.

It was one of those seemingly good ideas that just did not take off in the end. There were complaints from sellers about the marketplace prices being too low. Some movies were priced a lot lower than what you could buy them from places like eBay, Half.com or Amazon.com. Halfway through their existence, Peerflix did a big upgrade and switched from a credit based system to a dollar based system that caused issues within the trading community.

In the end what seemed to kill it was the marketplace though, you had lots of buyers with no trade cash or sellers refusing to sell at the prices set by Peerflix. I know personally I would go through looking for a movie and see lots of haves (people with the movie and willing to send it out) with little wants (people with trade cash (TC) to buy). In my case, I have 38 movies listed in my Peerflix account, only 1 movie (Seabuscuit at 3 dollars) has a “want” with trade cash.

A market economy can only survive if there is a balance in the system of buyers and sellers.
Here is a example from my own account of the problem:
Harry Potter and the Sorcerer’s Stone: 51 haves (15 ready to send) vs 4 wants (0 with TC)
Men in Black II: 71 haves (32 ready to send) vs 6 wants (0 with TC)
Lollilove: 1 haves (0 ready to send) vs 7 wants (0 with TC)
The Beatles – A Celebration: 8 haves (2 ready to send) vs 0 wants (0 with TC)
Trapped in Paradise: 32 haves (16 ready to send) vs 0 wants (0 with TC)

Trapped in Paradise is a particular sore spot with me thanks to the Peerflix upgrade. I had built a few credits up in my account. For some reason, I had added this movie somewhere in my account even though its not exactly on my must have right now list. No big deal, I had not recieved any movies from the system anyways. Then Peerflix made the big switchover with their upgrade and suddenly they send me that movie along with a couple other movies that were in some list I had, but not exactly DVDs I were craving. Now I’m stuck with some movies I couldn’t unload if I tried even though its my fault for having not removed them completely from my lists.

Bye Peerflix, you were a nice little experiment into a trade economy, better luck next time.

I recently saw a post by The Frugal Guy that presented the Financial Risk Advisory System, a parody of the government’s terror alert system. While it is meant in part as a tongue-in-cheek system, it does help you consider where you are at in your personal finances and what steps you might consider to improve your situation.

In the not so distant past, I could consider myself in the Blue zone, making ends meet and doing okay but had room for improvement. Lately I have been slipping down the scale into the solid yellow and dipping my toes into the orange zone. It was a two part cause, first I was not as disciplined as I should have been and I had a change in living arrangements that increased my expenses. I do not believe I was ever overly excessive in my spending on discretionary items, but could have tightened the strings a bit more. A larger part of my problem was boundary and enabling issues, otherwise known as a big problem saying no to certain people who “borrowed” money, which diverted money that could have paid down debt or gone towards a bigger emergency fund.

I have been pretty lucky to get a good deal of overtime in my current job which has kept me mostly in the yellow zone now. I do not have cable TV nor do I go on vacations to far away lands. I still have some fluff I could squeeze out of my expenses, but it is not so big and horrible that I can’t survive with them in my life. I have been getting less overtime at my job though and I’m seeing some of the consequences of my past problems with boundary and enabling issues which I have made some improvements on, but still is not perfect.

I’m facing a possible red zone though as my job is going away in less than two months as the company moves my department to a new city. I will get some severance so that will help a bit, but need to clamp down more and solidify plans in place to deal with the issue and move myself back to better threat level.

Warren Buffet has issued his annual report to shareholders of Berkshire Hathaway. It is always a good read full of information not only about his companies, but also investing and the economy in general. There are archives of his letters going back to 1977, be sure to check them out as well.

For the past couple years the company that I work for has decided against offering a Roth 401k. A bummer for me because it would appear to work nicely in my situation. With the 401k, you make contributions with after tax money and get the money tax free in retirement. It is nice if you have lower rates now or had deductions such as student loans or mortage interest to help offset the difference. Check out this article from Yahoo Finance to get a quick overview or the Roth 401k and if it makes sense for you.

Finally, the company announced that this year, they will be offering…you guessed it, a Roth 401k. This of course is right after they tell me I am losing my job and will not be working there pretty soon anyways.

Since I will be rolling my current 401k over into an IRA soon enough so I don’t think its worth even messing around with the Roth 401k. Just great timing all around…

Sometimes in life, we tend to get wrapped up with an idea that we lose focus on the big picture. Say for instance, taxes from investments, no one wants to pay more than they have to pay, but some people go overboard in trying to avoid paying them.

Warren Buffet talks about this in a quote from Buffet : The Making of an American Capitalist (p. 83), one of the best books about Buffet out there.

“What is one really trying to do in the investment world? Not pay the least taxes, although that may be a factor to be considered in achieving the end. Means and end should not be confused, however, and the end is to come away with the largest after-tax rate of compound.”

My brother called my tonight at work to ask if I could pick a few items up and drop them off at his house for him. It was on my way home so it was no big deal so I jotted down what he wanted, no big deal right?

So I get to the grocery, mind you all I had is a list of his items and a vague notion of some stuff I wanted to get for myself. I grab my cart and start wandering the aisles, picking up his items based on his list and my stuff based on “well I could use that”, “hmmm..that sounds good” or “that’s a good price, maybe I should grab one for stock”. I end up with a nice little cart of stuff.

I get done and head for the self-checkout and starting scanning my items. I was more than a little suprised when I saw the total. It was a good $20 more than I had vaguely budgeted (which was towards the high end of what I really wanted to spent in the first place) in my head for what was supposed to be a quick grab a few items for my brother trip.

Where did I go wrong? I didn’t make a plan. I went through the store aimlessly without a goal (a shopping list) nor I did not have a good predefined outline (budget). I should have made a list and had a solid idea of what I wanted to spend in mind before I even step foot in the store.

What about your career or personal finances? Do you have any goals clearly outlined? Do you keep an eye of them and how you are progressing towards your goals? Without a budget, it gets pretty easy to spend a few bucks here and there and quickly have it blow past your theory spending limits. Sometimes life can be just broken down into parts just like a shopping trip. Plan well and you will have a great trip! Skip all that planning and just wing it? You might just end up walking out of the store of life with a cart full of stuff you don’t need and a empty wallet.