Chasing the Bull

It seems to me that we live in a country that allows ridiculous things to continue to happen. We meander along with our lives, never questioning things that are wrong or seem out of place. Why do we do this?

According to Yahoo, crude oil dipped below $100 a barrel today for the first time in 5 months. A few months ago, it was at $147. Does this mean that gas prices will be dropping by approximately 50%? Will we be paying $2 a gallon again?

 Of course not, and guess what, most people will not even care.

Instead of doing anything about it, we will continue to drive our SUVs, 30 miles each way to work (in the snow - grandpa reference), while drinking our $1.75 20 oz. cola or our $5 Starbucks coffee. We will visit the local gas station once a week and merely shake our heads that it now cost $70 to fill up the Ford Explorer.

Sometimes our refusal to care is so bad that we do not even ask for what should rightfully be ours.

Did you know that the IRS has increased their fuel reimbursement recommendations to $0.585 cents per mile? For every mile that you drive your personal car for your employer, you should be receiving 58.5 cents. Are you getting this? Or is your company still paying 48.5 cents (the rate from 6 months ago)?

Why do we let the prices of items go up faster than we demand them to come down? Why is it OK for the consumer to continue to pay for gas as if a barrel of crude still cost $147? I am not sure why we allow this, but we do?

What do you think? Why is it so easy to raise prices but so difficult to reduce them once the price of the underlying commodity comes back down? I would love to hear your opinion on this.

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In a time, not too far in the past, I had been known to buy a few state lottery tickets. I would drop down $2, thinking that maybe, just maybe, I would get lucky and I could actually catch up on my bills.

Of course, that day never arrived. I think in the 50+ times I have played, I have NEVER picked one number correctly. Not even one lousy number! What I failed to recognize is that on my quest for quick cash, I ignored a sure path to wealth. The secrets of the rich do not exist. Sounds principle of wealth management do exist.

While reading MyOpenWallet, I first read about Ray Otero. This guy spent $30,000 last year of lottery and scratch off games. Thirty Grand! The real kicker is that he only makes around $40,000 and supports his wife and two kids.

Someone should really talk to this guy. Come on NYTimes! Quit running stories on these people and offer to help them. Find local CPA who will sit down with him and walk him through the basics. Explain to him the odds of actually winning. Teach him and allow him to retire one day with diginty.

Get him connected to the internet and direct him to a few really good blogs on personal finance. Frugal Dad, My Investing Blog, Bible Money Matters, and Get Rich Slowly should get him started.

Just don’t stand there and let him spend 75% of his income of lottery tickets.

How much money do you spend on the lottery? I hope it is not too much!

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I have to admit I really like NBC’s “ The Biggest Loser“. It is very motivating, inspirational, and yes, even educational. As it turns out, some of the things I have learned relate very well to personal finance. Please feel free to comment and let me know what you think!

5. Stop Complaining - Jillian always tells her students to stop complaining. She does not want to hear the word “can’t”. How many times have we blamed our situation on someone else? If only VISA would have rejected my credit card application when I was in college. If only the US mail system was faster, I would not have another late fee. If my high school would have actually taught us more about personal finance. It does not matter how you got to where you are! Stop complaining and take an objective assessment of where you are now. Only then can you start to make progress.

4. Strive for Consistency - Losing one hundred pounds is not something that will happen overnight. It takes discipline and a tremendous amount of effort, day-in and day-out, to see results. The same can be said about saving for retirement. You will not be able to save a million dollars this year. You can, however, retire with that much if you save and invest a little bit each month for the next 30 years. If you are still in your 20s, it will be much easier if you start now.

3. Accept Mistakes - With the exception of Neil’s 17 pound gain last season (which he did on purpose), mistakes happen. Every now and then, a contestant will bust their butts all week, only to gain a pound or two. The only thing they could do was to evaluate their diets and correct this going forward. Investing is very similar. Last November, I purchased shares in Force Protection, or what I call “The Worst Investing Decision Ever”. I purchased it around $17 and proceeded to watch it sink to $1.50. I cannot let this single thing affect my confidence in the stock market. I simply revisited my purchase analysis to see if there was anything I missed when I decided to buy FRPT. Turns out, there is now a class action lawsuit against them for accounting irregularities. Yes! The worst stock pick ever.

2. Think Long Term - The main reason I want Mark to be in the finals is because of the way his family makes him feel. He loves them and you can see it and feel it when he talks. Mark had to sacrifice months of his life, away from his family, in order to add years to the end of his life. He realized that short term wants should sometimes be secondary to his overall life plan. I relate this to investing for my future. Sure, I would love to buy my wife a new wardrobe. She deserves it as hard as she works to raise my son. We have agreed, however, to postpone these “desires” for a few years, in order to secure our future.

1. It does not matter where you are - JUST START TODAY - Kelly tipped the scales at 271 pounds when she started The Biggest Loser. Can you even imagine how she must feel now. She has lost almost 100 pounds. This did not happen overnight, but I can tell you with absolute certainty, that she is glad she got off the sofa and started. This is the same with saving, eliminating debt, and investing. It does not matter whether you have a negative net worth or not. You can change your circumstances, but to do so, you have to start somewhere.

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