APOLOGY

I apologize, if there is anyone reading this blog, that I have not updated in recently. I do plan to get back to it shortly.

You might be interested to know that, because of diversification, since 1996 through 2008 my investments and savings have returned an average of 5.65% a year. Because I had no income before 2001 I had to spend part of that. Therefore my net worth has increased by only 3.25% a year.

So my net worth is increasing faster than inflation and even with the recent stock market slide I am not doing too bad. Instead of cashing my stock funds I am actually slowly increasing the amount of stocks I have in that portion of my investments that I do not plan to touch for 10 years.

Chapter #3 The Importance of Saving Often

In the previous chapter we talked about the importance of starting to save early and the effect of a single purchase on accumulated wealth and income at retirement. In this chapter we will be looking at the effect of frequent saving over time. Many of our spending decisions commit us to recurring expenditures.

If our 18 year old friend, Bill, from the previous chapter decides that he will get up five minutes earlier every day and make himself a cup of coffee at home rather than buying a cup on his way to work, he will be able to save $1/day, 250 times per year. At 8.4% for 50 years at an inflation rate of 3% he would end up with $269,000.

Every time you consciously, or unconsciously, establish a habit or make a decision to incur a daily, weekly, or monthly cost you are deciding to reduce your accumulated wealth at retirement and your retirement income. Just how much it will be affected is a factor of the annual cost, the number of years until you retire, the rate-of-return, and the inflation rate. By using the Calculator Repetitive Future Wealth and Income you can determine the impact of any recurring expenditures.

Chapter #2 The Importance of Saving Early

The sooner you start to save, the more money you will have when you want to retire. Invest that dollar you were going to spend on a cup of coffee today and you could have $56.42 or even $289 when you retire. These amounts would generate $4.74/year and $34.68/year in income.

Go to my book (the link is in the upper left of this blog) and read Chapter #2.

Use that Calculator link embedded in Chapter #2 to calculate how much a single purchase is costing you interms of Future Wealth and Income using your years to retirement, expected earning rate and inflation rate.

Chapter #1 - Living within Your Means

Everbody Drives a Used Car


If you wish to be financially secure, in the future, it is necessary to live within your means. What does that require? Simple put that means that your income must exceed your expenses.

If you are carrying a monthly balance on one or more credit cards, are purchasing items on time, or taking out a second mortgage or other loans your are living beyond your means. There may be more, but I can think of only 4 legitimate reasons to borrow money. These are Educational Loans, a House Mortgage, Medical Expenses and a possibly an inexpensive first car, if needed for employment.

I would go even further and say that if you have no credit card debt and are paying cash for everything but don’t have a savings plan you are still living beyond your means. As a minimum you need to have an Emergency Account worth at least 6 months income and be saving money for your children’s education and your long-term financial goals like retirement.

Now is the time to establish your priorities and to make sure your spending/savings is in line with them. Are name-brand clothes more important than your child’s education? Is a top-of-the-line new car more important than a comfortable retirement? As a first step you should identify your wants as opposed to your needs and be prepared to defer the former until you can afford them.

Everybody Drives a Used Car

The Links to the book and my web page are in the upper left hand corner of this blog.



I plan to go through book one chapter at a time, with a new chapter every week of so.



If you have any questions or comments you can make them as comments to the appropriate post on this blog.



Let's get started with the Introduction



Any Questions?



Please defer questions about later chapters until I referenced them in a post and keep in mind that I am updating the book and have only completed the first 7 Chapters.



While I hope that the information covered will benefit people of all ages, I think that it would be particulaily helpful to young people just starting out in life. You might want to consider recommending it to your Children or grandchildren.



Here are some video's you might find interesting.



http://www.youtube.com/watch?v=sMyK_tryxv0



http://www.youtube.com/watch?v=JChhILeSzdI



http://www.youtube.com/watch?v=_3t0gx5qnN0

Access to book: Everybody Drives a New Car

With companies cutting back or eliminating pensions and the sad state of Social Security it is more important than ever you to plan for your Financial Future.

In this site I hope to provide you with the motivation, methods and tools to help you to deteremine your financial goals and achieve them.

http://dunc462.googlepages.com/everbodydrivesausedcar

The basis of this site is a book a wrote about 10 years ago.

It is available at:
The Book - Everybody Drives a Used Car

Only the first six chapters have been updated!

I would appreciate any comments and suggestions you may have.