Apr 28, 2010

Why "Vacation"


When I went to college away from home, and then moved further away from my family home after graduating, most every "vacation" I've taken has been a stress-filled trip back east to visit my parents and relatives. These trips are totally worth it, but I don't consider them "vacations."

Since I've graduated college in 2005, I've taken a few actual vacations. All on the cheap. I did a "free" trip to Israel through Birthright Israel and spent an extra week traveling around staying with distant relatives who often fed me. Last summer I went to Disneyland with my friend for her birthday... we went for one weekend. I did another weekend trip to LA to see a few people. My boyfriend and I have taken the occasional mini road trip halfway down the California coast for... a weekend. We've done two trips to Tahoe... though we haven't skied or done anything vacation-y. His dad lives there so mostly we visited his dad and wandered. I haven't taken any "vacation," vacations, with the exception of the Israel trip. And that was one big timeshare sales pitch for moving to Israel anyway.

A few months ago, a friend of mine asked me if I wanted to go with her on a bootcamp fitness cruise for a week. It sounds awesome... relaxing AND healthy. But I couldn't imagine ever spending THAT MUCH on vacation. It doesn't help matters that now, as a contractor, I don't get paid time off. Right now I'm new at my job so I wouldn't consider taking a vacation any time soon. But even when the time came about when someone with my income should take a week to go somewhere, I can't fathom going.

My coworker loves to travel around the world. I think he does it pretty cheaply, but he's always traveling. He just goes on his own... I'm not independent enough to do that. I'd want my boyfriend to come with me... but given his income, either I'd have to pay for both of us to go on the vacation, or we'd be sticking to our mini weekend trips.

Camping is always an option, and one my boyfriend enjoys, though hasn't done in a while. I like camping, but I don't really see myself enjoying a week doing it. He wants to go to Yosemite for a week. I'd rather lounge by the beach if I had to do a week in nature... and have a shower nearby.

In any case, I wonder if I'll ever vacation again. I just don't really see myself enjoying vacation the way I used to... knowing how much it would cost. Maybe one day when I have kids I could justify the expense, but for me, I don't know how I could reasonably take a week off and go to some exotic resort for a week of pampering and relaxation. How can anyone relax with the price tag?

But then I wonder, do I really ever need to vacation? Sure, I have this deep-seeded longing for luxury. I dream of a day when I'm "rich" and can spend as I please without worrying. But... unless I win the lottery, that day will never come. So I guess I'll be sticking to my mini vacations, and try to enjoy my trips home... because that's all the vacation I'm going to get.



Apr 27, 2010

Follow Up to: Tips for Making More Money Long-Term for 20 Somethings

A few days ago, I wrote a post about how to make more money over your entire life. The trick? Believe you "need" more money than you do now and approach your life's choices based on that need... then save the difference in what you get vs. what you actually need. Always live below your means. Ok, this isn't revolutionary advice, but I got some interesting comments from my readers, and I wanted to respond.

Anonymous #1, from Kentucky, said "I like the idea behind this advice. I also agree to an extent. On the other hand, it's not just career choice that will determine the amount that you make, but geographic location as well. A $120,000 per year job to you is more like $60,000 per year here."


Anonymous #2 said "that was the most ridiculous thing I've ever read! ...No offense, but you are still a kid and have a lot to learn. Don’t get me wrong, you are way ahead of most other 20-somethings (not hard to do in this day & age, though!), but be careful about advice you are giving (or taking). Also – you could reach your $100K goal MUCH easier if you moved to a place with a lower cost of living."

While one commenter loved my advice and the other hated it, both had a similar comment on how my choice to live in California makes it more difficult for me to reach my financial goals. I disagree.

I've lived in many different parts of the country through my life, though perhaps never the places where the lifestyle is extremely cheap. But I'm not sure how much a move would save me, unless I moved back home and lived with my parents.

My rent right now is $630. With utilities that adds up to maybe $700 a month. Granted, in Detroit, according to Craigslist ads, I could get similar room in a 3br shared apartment for around $350 a month. I don't know Detroit so can't compare my nice neighborhood to the offerings on CL, but let's just say the rents for a room are half what I'm paying now.

Everyone seems to think living in California is impossibly expensive. It's not. It IS expensive if you want to buy a house here. Gas is a little higher than in the rest of the country. State tax is higher than some other states. Ok, it's not the cheapest place to live. But there are also a lot of opportunities for work here, especially in the areas where it costs more to live. So salaries do, to an extent, compensate for the difference. As my first commenter said, $60k in Tennessee is maybe equal to $120k in California. I'm not sure I agree with that math, but there's obviously some truth in it. I COULD move to a cheaper place, make less money, spend less on rent, and save the same amount. But I would have a very hard time finding a job in my industry outside of this area. If you're in an industry you can work in anywhere, then by all means, live somewhere more affordable. That doesn't change my argument that you should always think you need more money than you do, and that this thinking will help you earn more in the long run.

Now, commenter #2, who has worked as a hiring manager, made a good point. He/she said that once a candidate for a job refused to take the job unless given $5k more than the offer. Eventually, the company hired someone else. OK, I never said "be stupid." If you really want a job, are unemployed, and have no other options (if you "walk" will you be unemployed for another six months? Or are there other opportunities on the table) then take the job. My logic still works, though. If you think you need $x more per year, then you might get a side job, or seek out freelance income to meet your goals. You don't NEED to make the extra money through your day job. It doesn't hurt to push a little in negotiating but always be realistic. I took a big risk during my negotiations for my current job and it paid off. I was really nervous that it wouldn't, and I got lucky. I also knew that I was by far the top candidate for the role and my company really wanted to hire me. I also did not get what I asked for, but I quickly accepted a realistic offer that was still much higher than I was making at my previous job.

In comparison, I look at friends of mine in their 20s who are living at home or living in cheap apartments and thinking that they only need to make enough to cover life month to month. The fact is that your future salary is largely determined by what you make before it (not always, but having a strong salary history helps.) If you spend your 20s making a smaller income because you do not see a reason to strive for more earnings, then you will be at a disadvantage in your 30s. Again, I'm not saying this works for every field... some fields have set salaries. You can still make extra money. If you're fortunate enough to not be in debt in your 20s, take advantage of this and save as much as you can. The best way to save more is to make more. That's the math I believe in.

Commenter #2 also asked "Do you have a net worth goal you are aiming for by the time you are 30? Don't you think NET WORTH is a better goal than just "savings?" I keep track of mine yearly. I just looked back to what it was when I was 30. I did NOT have $100K in the bank then, but the net worth was $170K."

I am not sure what factors into Net Worth to be honest. Right now I'd say my "Net Worth" is my bank account... that is, the combination of my savings, Roth IRA, stocks, CDs, and other investment accounts. I don't own a home (again, that's one of the things that is too expensive for me, living in California) but I own a used car (it's worth maybe $2k, but I don't bother including that in my networth because I'll use it until it stops working) and a few other gadgets and things that I don't count.

So, commenter #2, what was that extra $70k including for your net worth at 30? Did that include a house? That makes complete sense, especially since you have a family. Since I'm single and could move to a job in another city at any moment, it doesn't make sense for me to own. So my whole Net Worth IS my bank accounts.

Thanks for all your thoughtful comments!


Apr 26, 2010

Graduate School: Still an Option, But is it Worth It?

I'm not an academic. Since I was young, I couldn't focus in class, I rarely completed my homework, and while I supposedly had a lot of potential and was at once point dubbed "gifted" by the public school system, academia was never my forte.

So why, now that I've earned a college degree and made a career for myself, still long to return to the Ivy Tower? And what would I return for?

I'm still torn between options, including whether to apply at all. On a pure rational front, I'd be best off getting an MBA if I could manage to score high on the GMATs. At this point I think my experience has a shot at canceling out my less-than-exceptional undergraduate transcripts, but the GMAT would be a toughie.

But does an MBA even make sense for me? I've worked with many people who have MBAs, and many who don't. I've been managed by MBAs and I've been managed by engineers-turned-marketers and artists-turned-non-profit-owners-turned-business-women. I've been managed by people who get it and people who don't, people who succeed by pure luck and others by pure talent, and others who fail for all the wrong reasons. So why get an MBA?

Partially, I want to do it for myself to prove I can. It would look great on my resume (if I go to a top 10 school which, again, is not exactly an easy feat given my overall credentials.) I'd spend two years focused on learning about business -- and maybe I'd even learn something practical to apply in the real world. Mostly, I'd feel more confident in my experience as a marketer with an MBA under my belt. I don't need one, but to really move up the ladder I either need to start my own company or get an advanced degree. Or have friends in high places.

The other option, still, is to go to graduate school for interaction design. I'd enjoy this more, but I worry it's too focused in an area that has limited value if you don't know how to program well. I could learn a bit of programming on my own or in school, but I'll never be the programmer who moved into design. I'll also never be the programmer who moved into business management. It seems I'm already in trouble, not being a programmer and all.

I feel like I'm at a point in my life where I need to make a decision on this. I'm 26 now, and I'm not getting any younger. I've had a solid 5 years of work experience in non-profit, start-up, and large international corporate environments. I'm still not sure where I fit into the work world. I feel awkward in marketing, as I'm not super creative, nor am I brilliant with numbers, and I'm also shy in a field run by the outgoing. Most of all, I dislike "marketing" as a field where you must produce lies to sell a product that isn't as good as it could be, if the business was managed better and the consumers were actually listened to. Which leads me to thinking I really ought to run my own company. And I don't really need an MBA for that. I need an MBA if I want to be middle management. And I don't see myself as middle management. I know middle managers. They are great people, but a different breed of people. They are willing to do whatever it takes to reach their business targets. That's what capitalism is all about. A little lie, here and there. Make everyone want what you're selling, no matter how much it's "worth."

Is that where an MBA would lead me? I don't know if I have the stamina to lead, though I know in the long run I'll never have the heart to follow.

What do you think I should do?


Apr 24, 2010

The Long Term Trick to Earning More Money in Your 20s and Beyond

Let me preface this by saying that I am very aware the amount of money you make is largely determined by the field you're in. If you have your heart set on saving the whales for a living, you may never make as much as someone working in marketing for a national firm. But that doesn't have to limit you to the paycheck-to-paycheck lifestyle.

In five years since graduating college, I've managed to go from a $35k/year job to a $120k/year job. Do I deserve this income more than anyone else making less than me? No. Will this income remain stable for the year's to come? I haven't the faintest.

But -- one thing I've learned is that, while it's easy to accept scraping by in your 20s, you should live like you need more money TODAY so you can save for later. When you interview for jobs, they can't ask if you have children... or an expensive mortgage... or debt that you need to repay. If you're in your 20s and single with little or no debt, you may tell yourself "I'm doing fine on $35k" and then you wonder why you are having trouble saving any money for retirement or anything else. Live like you need $20-$30k more a year to get by, and pursue your salary - not your lifestyle - based on this white lie. It will give you that extra motivation to negotiate for $5k more a year, or $10k more a year... which adds up over the long term.

The trick to earning more money long term is setting savings goals for yourself. You may not always hit them, but having a number (even one that seems impossible to reach) in one's mind shifts the way you go about living. When you're looking for a job, you're willing to negotiate for the extra pay because it's one of the only ways you may ever reach your goal.

I read that you should have as much in savings when you're 30 that you would like to have per year when you retire. My goal is to have $100k in savings by the time I am 30. At my last salary rate, this was looking quite unlikely. I have 3.5 years until 30, and I'm only at $55k in savings right now.

When I got laid off at my last job, I applied for a lot of different positions, all which had varying salary ranges. Some paid really crappy. I knew I needed something, and I knew I could get by on the crappy pay. But I wouldn't hit my goal of having $100k in the bank by the time I'm 30. So that fueled my job search in a different way.

The other day I was talking to my boyfriend. He thinks I'm "rich." He has an $18/hour part time job and hasn't tried to get anything better. He has no benefits. (Well, neither do I, but I can afford them on $120k and still save.) He told me about his friends who are trying desperately to find a $30k a year job. While I'm by no means arguing that you shouldn't take a $30k per year job if you find something that you'd love or it really is the only option, by realizing you are worth more (or at least telling yourself you can convince someone to pay you more... and that you are going to save the money) probably increases your long term earnings.

Let me put it this way... I could easily be still making $50k or less, and I'd probably be just as happy NOW. But, later, I wouldn't have much in savings, and I'd be really upset that I missed out on the opportunity in my 20s to put a lot of money into savings and let compound interest work its magic.

If you can't make more money at your current job or in your field, get a second job, but just live as if you "need" more money to survive BEFORE you actually do. I'm freelancing on the side of my full time job because I know now is the best time to earn income. Later when I have a family I won't want to sacrifice the extra hours of living to be at the computer... but now, there's lots of time to earn money and then save that money for the future.


Apr 11, 2010

Returned $250 Worth of Clothes

A long time ago in a far off land I loved trips to the mall. While not everything looked great on my curves, for the most part outfits fit. And as a student I could get away with wearing funky looks, including low-cost versions of trends.

These days, I'm having trouble finding the right look for work. Over the past few weeks I've done a lot of shopping, and despite spending a lot, not much buying.

Old me would have kept items I bought hoping to be inspired to wear them one day, even though in the back of my mind I knew I never would. But from now on I'm not letting any money go to waste, especially on expensive clothes that I just don't love.

So I returned the $130 pair of patent leather shoes to Ann Taylor that were too big and had a high heel that I'd never wear. The other day I found a pair of low-heel shoes by Nine West that were $78 and have worn them every day since. The Ann Taylor shoes are back at the store and the money is back in my bank account.

I also returned a blue cotton Theory dress to Bloomingdales that cost me $140. I don't love the dress. My boyfriend says it makes me look bigger than I am, which was enough to inspire the return. So that's back to the store as well.

Even with returning those items, I've purchased a few things I am keeping:

2 pairs of machine washable work pants from Nordstrom petites, $78 each.
4 button down short-sleeve shirts from Express, about $20 each.
1 Calvin Klein black jacket, $99.
1 pair of black shoes from Nine West, $78.
1 black turtleneck by Theory, $80
1 gray sweater jacket by Theory, $140
1 pair of Ann Taylor black pants, $100
1 blue dress t-shirt for work at Ann Taylor, $40
1 skirt on sale at Express, $20

So I've spent a lot on work clothes, but I feel better now that I've returned the two items that I'll never wear. Right now I'm looking for a few items that I need, and then my work wardrobe will be complete..

- 1 brown or blue jacket (for brown pant days)
- pair of brown shoes (or shoes that match brown pants)
- 3 button down long sleeve shirts that are machine washable and actually fit me

I've been looking at all the stores but have had no luck with these items. Oh well, nothing wrong with waiting until next month to make more purchases. I haven't even gotten my first paycheck yet!


Early Retirement, What it Means to Me

I've been thinking a lot lately about the concept of early retirement. From reading blogs like Early Retirement Extreme and Free at 45 I've begun thinking about the true meaning of life. Not from an existential standpoint, which I've already thought about long and hard, but from a view of what every waking moment of my day is worth from now until my death.

My parents and their friends are getting old now. By old, I mean they're in their late 50's and they are really starting to look old. My dad is dying of cancer so he looks even older. When I was a kid, I thought, well, I want to live forever. I never wanted to be young forever. I guess your late 20s is when that thought pops into your head. I don't really want to be "young" forever. I feel like one's 30s are the perfect mix of being young and old. And the 40s aren't bad either. But once you hit 50 your body does start to seriously age. You can definitely work hard at keeping up your body through physical exercise, eating right, etc, but the years take their toll on every body.

When I think about early retirement, I don't have a dream of retiring to some desolate island and relaxing on a beach. I dream of working hard but doing what I want, when I want. I want to get to a point where working freelance or part-time on my own hours won't kill my bank account, where my savings are large enough that the long-term stock market gains will provide a substantial portion of my income.

So over the next few weeks, I'm going to work on calculating exactly what all this means from a financial standpoint. What year could I "retire" from 9-5? How much do I need to earn now and in upcoming years to obtain this goal? How much do I need to save? And when exactly can I retire "early?"

My current plan is to try to save $6,000 per month while I'm fortunate enough to have a job that pays well and low living costs. I'm not sure if this is maintainable over the long term. I'll update in the near future with some further calculations to determine how much I will need to save each month to meet my early "retirement" goals.


Apr 8, 2010

Car Damage Pictures

The Damage:

The evil pipe that caused the damage:


Need Advice: Car "Collision," Deductibles, Insurance

My car luck is really not doing so great lately. It's a long story, which I'll tell below, but the main question I have is -- should I go through insurance to get the damages fixed, should I even both getting the damages fixed, and is it too late to decide not to go through insurance?

Here's the story.

My first day of work I left my car at the public transportation garage. Returned to my car, the back window was smashed (it's a small window that doesn't open because it's a 2 door) and the passenger seat door was busted.


Fast forward a week. To today. I'm driving out of a parking lot making a right-hand turn. I don't see anything to my right so I start to turn very slowly. I hear some scraping noise so I immediate stop my car and back up slowly. My passenger side mirror looks fine, it's not hitting anything, so I figure I will back up and then examine the damage...

Instead -- "BOOM" -- my large passenger side window shatters. A louder scraping noise is heard. I stop the car, get out, and see that a pipe has cut a huge gash into the door and basically made the door a wall (the handle doesn't work / it won't open) and glass is everywhere.

I look at the window in shock, then drive back into the parking lot and promptly call my insurance. Which was maybe a really bad idea. I told them exactly what happened... then they told me that this would be a collision claim and I have a $1,000 collision deductible. I've never filed a collision claim and I know I pay a lot in comprehensive so that if damage happens to my car that isn't an accident I'm covered. I've had a few break-ins in the past and they've all been covered at 100%. Even hitting a deer and the damage from that was covered entirely. This, however, would have a $1000 deductible.

So I stopped and said, well, I think the front window had a crack in it from the break in. Ok, so it was a stretch. But I figured at that point it was worth trying to get this covered under my comprehensive policy. Even if they would just fix the windows for me under the comprehensive and I could leave the car door as is. The woman on the other line said that she'd add a note about this to the other claim. I am not clear if she opened a collision claim but it sounds like she maybe just tacked on the report to the comprehensive claim. I'm supposed to get an appraisal tomorrow from a place my insurance company referred me to.

Now the questions I have are...



3) Should I get everything appraised and wait to hear if they will cover it all under comprehensive (they won't... not with the giant gash in my car door) and then figure out what to do?

4) Should I just say f'it and buy a new (used) car? I bought my car in 2005 with 130k miles on it for $7k. It's the first car I ever owned so it has its share of new-driver dings on it, not counting today's giant gash. It now has 170k miles on it so I can't imagine it will last that much longer. It's a Toyota so maybe it will last to 200k, so I could see it lasting another 3-4 years if I'm lucky, or longer if I don't drive it that much. Blue book trade-in value for the car in "Fair" condition is something like $1500. I am not sure what condition the car is in right now... looks-wise I'd say it's in pretty "poor" condition but the insides are doing fine. It's definitely not driving quite as smoothly as it did when I first got it in 2005, but it is a nicer drive than some other cars I've been in. Would it make sense to donate my car to charity (or trade it in at a toyota dealership for the pennies they are willing to pay me) and move on with my life? Ignore all the claim filing and just start fresh?

5) Should I get rid of the car (charity or trade-in) and not have a car at all? In reality, this doesn't make sense right now because I live in the 'burbs on top of a giant hill and it's pretty impossible to get around without a car. I'm sure it's do-able, but it would be very difficult. And my commute to work with a car is already 1 hour.

6) But... should I get rid of my car and move to the city? I really like my current apartment... it's cheap ($700 a month with utilities about), in a really beautiful area, my roommates are mellow and we get along fairly well, my room, while small, faces greenery and all-in-all my place makes me happy. It feels like a home. Any place I get in the city will be more money, or smaller, or in a worse neighborhood, or all of the above. I could just move closer to a train stop so I could walk to the train... which provides a lot more options... but that still requires moving, and finding a place I like, and finding roommates I can get along with, or living alone, which I've decided I don't really like doing, and costs a lot on the utilities front. But if I move some place near public transit I could get rid of my car and just not have to deal with the hassle of owning one.

7) Or should I just go to a car shop and get everything fixed myself, even if it costs a lot, and just eat the costs of getting the fixes done without going through insurance? -- Is it too late to do that ... I already reported the claim... but I'm not sure they filed anything under collision yet, or at what point they will in this process. If I don't decide to get the car fixed, will they still file the claim as collision if it gets appraised and the repair shop reports that the damage was caused by a collision (probably) -- I can't exactly ask the insurance company how this will work.



Apr 6, 2010

Update on 2010 Goals

26 Aspirations and Goals for 2010 (from December)

1. Save 20% of my income for retirement


2. Save 10% of my income for other upcoming expenses


3. Increase my net worth to $60,000

Updated goal: increase my net worth to $100k

4. Study (a lot) for graduate school tests


5. Take the GMAT (and poss retake the GRE)


6. Apply to grad school(s) in fall 2010


7. Stop drinking alcohol (except on my birthday)


8. Go to the gym 3 times a week




10. Eat 1300 calories per day


11. Drink 8 glasses of water per day







Well... it's not that bad right now.

















23. Start saving for a car replacement










Apr 4, 2010

Should I Rent Forever?

I've been fairly happy renting thus far in my life. At 26 years old, I've never really contemplated owning my own place until now. My rental costs have varied greatly over the years...



The problem is that now I live far from my job so the cost of the monthly commute is about $230 / month for parking at the public transit station plus the train, and that's not including the gas it costs me to get to and from the train. So... you could say now I'm spending $300 / month on transportation, or $1000 / month on "rent" including transportation and utilities. So I ask myself... should I move? If I do move, how much should I pay for a place? While my roommates and I aren't best friends, we get along fairly well, and I've gone through my share of roomie nightmares in the past, so I'm not in the mood to get into any of that mess while just getting into the jive of things at my new job. Still, the cost of the commute plus the actual commute (about 1 hour 15 minutes each way) will eventually get to me. I could even find a place that costs the same or cheaper slightly closer to work... maybe 30 minutes closer... because there are some areas that are not as nice as where I live now that are on the way towards the public transportation stations. I really should be living there. But I just don't want to deal with moving.

Then, the idea always pops in my mind... what about buying a home? Well, that's really not possible right now... the average costs of a 1br condo here are like $600,000. Given that I only have $50k in savings at the moment... it will take me a long time before I could even afford a down payment on that. And the more I think about it, the more I realize owning a home... at least in this area... may never make any sense. It's just too expensive. I look at how much my parents still pay for their house after all these years in mortgage and property taxes and homeowners insurance and think, wow, I should really just rent forever.

Of course, when I have kids one day, I guess it would be nice to own a home. I liked growing up in one place all my life... I think it would have been really tough to move around a lot, being as shy as I was. Then again, lots of families move a lot and they do just fine. And you don't have to move all the time in a rental, you just never know when your landlord will decide they need you to leave. I guess that on its own is enough reason to consider owning. But really, how can anyone afford home ownership here? This year I've hit six figures... I may even make $150k this year, and that isn't near enough for me to own a condo or a home in this area. I think I'd have to be making something like $300k / year before I could even really consider owning.

Do you own a home? Do you rent? What's your monthly cost for owning or renting? Why do you own... or rent?