Rule Your Wallet Blog

Amazingly, I stayed on budget for these two sales days. It wasn’t easy with all the marketing and flashing lights I was inundated with.

The good news is I finished my Christmas shopping, so that is one less thing to worry about. The great news is I didn’t buy anything for myself and wasn’t sucked into the feeding frenzy.

How did I stay on budget?

Continue Reading

At the end of the day, if your finances are in bad shape then you have one of two problems. You are spending too much money or you are not earning enough money. It is that simple.

I know what you are going to say. What if I have a bunch of unexpected expenses or one large unexpected expense? It could be argued that in this case you are not earning enough money. If you were earning enough money, then you would have the necessary insurance and funds available to cover these types of expenses, in theory. Continue Reading

Another good month, with nothing interesting to report. Stocks are doing well and my emergency fund is growing right on schedule.

Debt

Credit Cards $0 – You can see my How I paid off my credit cards post for details

Student Loan $13,295.64 (-1.14% total balance)

Savings and Investing

Emergency Fund = 2.26 months (+0.66 months) I am on track to hit 3 months before the end of this year.

Dollar Savings Plan Fund = $17 (+43 $200 put in savings and deducted from total)

Spare Change Savings Fun = $72 (+23 I only add to this when a roll of coins is taken off the coin sorter)

ROTH IRA Performance = +1.4% for the month of September

401k Performance = +2.7% for the month of September

Unexpected things that hit my budget.

$xxx Birthday present for my wife.

Mistakes

I don’t see anything that qualifies.

Goals for October

Same Goals as last month.

1. Keep throwing all my extra money into my Emergency Fund. I am trying to get this to 3 months as fast as possible. (Successful for August)

2. Do not spend more than $50 on myself for things that I do not need. We are talking about computer games mainly. (Successful for August)

Here are my favorite links from the Personal Finance Blogospher. This week there was a particularly good mix of articles as you can see from the length of the list. Enjoy!

Rental Property Series: Overcoming Setbacks @ Eyesonthedollar

6 Milestones for Entering the Middle Class @ConsumerismComentar

Auto Insurance Basics And Recommendations For Everyone @FinancialSamurai

Retirement in Beer Terms @FiguringMoneyOut

7 Considerations for Buying A Cheap Car @ModestMoney

It All Goes Back to the Emergency Fund @AmericanDebtProject

“Extra” Paychecks @Mymoneycounselor

Yes. Parents Should Open a 529 Plan for Their Children@Myfamilyfinances

Reader Profile Friday: Rule Your Wallet Blog @Bugetinginthefunstuff

What Will YOU Leave The Next Generation? @BudgetsareSexy

4 ways being an asshole affects your finances @DailyMOneyShot

Don’t Pay for your Utility Company’s Green Energy Program (or Trust Super PACs) @20SomethingFinance

Investing and Inflation Protection @FiveCentNickel

People Making a Lot of Money Still Don’t Have Enough to Retire @Lazymanandmoney

Kids Are Temporary @LiveRealNow

My Retirement and Debt Plan @MakingSenseofCents

Price Comparison: Selling My Old iPod Touch Online and In-Store @MyMoneyBlog

Types of Life Insurance for the Beginners @OneCentataTime

Why do the rich get richer?

Wealth accumulation over 30 years

This question fascinates me.  Not only because it is asked so often, but also because of some of the replies I have heard.

My favorite answer comes from talk radio, “The rich get richer because they keep doing what made them rich.” Thank you, that is very helpful.

What do rich people do become rich? If we agree with Fisher, he would say that the rich are the patient. The personal characteristics, listed in Fisher’s Impatience Theory of Interest, they posses lead them to be more patient.

The more important characteristics are foresight and expectation of life. According to Fisher, the patient looks towards the future to see what their future needs will be. The impatient Continue Reading

Fisher and Impatience

Fisher’s impatience theory of interest is the product of general economic equilibrium.  His reasoning is that you should not be thinking of money today for money tomorrow. Instead, think about economic equilibrium as goods given up today for goods tomorrow. Based on this, the real rate of interest (more on this later) is no more or less than the relative price of goods today versus goods tomorrow.

The Fisher Equation

In the Fisher equation “r” is the real interest rate, “i” is the nominal interest rate (per the Federal Reserve), and “g” is the rate of inflation.

Fisher also believed that the real rate of interest is the most important number in the economy.

Fisher would argue that, for every year you have money in a savings account your savings will effectively loose 0.67% of its net value. As counter as intuitive as that is, the real rate of interest (2012) is negative. The current interest rate is Continue Reading