My 2015 Financial Year in Review

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I thought about reviewing my 2015 finances at the end of the year, but I decided against it. I didn't want it to get lost in the shuffle of all the other year-end reviews. Plus if you were anything like me, you were focused on the holidays. I didn't have time to read too many article, much less in-depth ones covering a whole year.

Finally, I want to publish what I feel are my best articles when people are mostly likely around to read it. Now is a great time, because you can learn from my mistakes and have a terrific 2016, right?

I started to write this and realized that I had a ginormous amount to say on each area. It didn't make a lot of sense to put it all in one article and lull you to sleep, so I divided it into a few different areas that I'll cover over the next couple of weeks. (If you find this stuff boring, don't worry, I'll be working in other content as well.)

Here are the areas, I'm covering:

  1. My 2015 Finances Reviewed: Stock Investing
  2. My 2015 Reviewed: Real Estate
  3. My 2015 Finances Reviewed: Blogging/Income
  4. My 2015 Finances Reviewed: Net Worth (and Everything Else)

The first of the series will be posted in a few hours. I will update this post and link to the articles as they go live.

I've written most of the articles already and they have a common theme. They all start out with a challenging situation. In fact, the news on almost all fronts looks very bad. However, if you can make it to the end, you'll find that overall each area has positives that may even outweigh the negatives.

It may sound trite to suggest that everyone should review their last financial year, but they really sound. If I didn't have a personal finance blog, I doubt I would have sat down and wrote it out. I learned a lot by taking the time to put it on paper screen. I'm also a lot more optimistic on where my finances are going now that I've blasted through most of the challenges.

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Last updated on January 20, 2016.

Amazon Echo, Revisited

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Last year (by a few hours), I reviewed Amazon Echo (read the review).

The Echo is an odd device that doesn't seem to sit any existing category of consumer electronics. It is a digital information assistant like Apple's Siri, Google's "Okay Google", or Microsoft's Cortana. However, it isn't designed to be portable. It also wasn't released with a large base of knowledge. It is still far, far behind of the those Big Three phone platforms.

Instead of being portable it has very good speakers and microphones. It's always listening for the key word, "Alexa" that tells it to pay attention to the next command. I've had it work from over 30 feet away when there are no other distracting sounds.

When I last reviewed the Echo, I was one of the first people to receive it. It couldn't do too much more than play music. And the music was mostly limited to Amazon's Prime library. It has Bluetooth, so I could pair it with my phone and run music through that. It works fine, except when you do that Alexa (the Echo) becomes kind of dumb. I can't tell it to find the Aerosmith MP3s on my phone and play them.

You could do a few other things such as tell Alexa to set a timer or add an item to a shopping list. (Unfortunately, the shopping list wouldn't work with Wunderlist, where I keep my lists).

In short, the Echo could do quite a few different things, but nothing particularly great. I bought in because I liked the concept and put some faith behind Amazon's engineers being able to expand what it can do.

Since that review, Amazon has sent me regular updates of what they've added. Here's a few of them:

  • Sports scores - This was kind of a no-brainer. I'm almost surprised it didn't launch with them.
  • Traffic information - You have to set up your standard commute online first, but then you can simply ask, "Alexa, what is the traffic like?" Since I work from home, this isn't particularly useful to me, but it could be handy for a few people.
  • Link Your Pandora account - This was a big one for me because I listen to Pandora more than my own music collection of MP3s.

I want to expand on that last one a bit. It is so much easier to ask Alexa to "play my Pandora" station than in it is to use any app. When I use the Amazon Fire TV Stick in my bedroom, I have to turn on the television, switch the source to the TV stick, and then navigate to the Pandora application. While the Fire TV stick has other advantages, score a win for the Echo for playing my music as soon as I can think about it.

These are all small changes to things that the Echo could do out of the box.

There's one more big addition that has come about since my original review. The Echo can actually controlling items in your home.

For example Echo now works with Belkin's WeMo Switch to allow you to turn on and off appliances. That might not be the most exciting thing in the world, but has been the basic building block of home automation for years.

The other thing that Echo can do is work with Philips Hue Lightbulbs. These bulbs are clearly for the "early adopter" audience. The bulbs change colors and can even sync with shows like 12 Monkeys on the Syfy network (which you should definitely catch). It's out of my budget for the novelty, but it would be interesting to see my room's change lighting with the action of my television. The Red Forest on the show was freaky enough without my whole room turning red.

The Echo can't change the colors of the light bulbs right now. It is limited to turning them on and off and dimming them.

Again, this isn't super-exciting, but it is baby steps. I don't think locking and unlocking doors is too far away. If you have a lock that is wifi enabled, I would expect it to be coming down the pick any day now.

What I'm really hoping for though is for Alexa to read my email to me as I make breakfast. (If you are concerned about the privacy risk here, there are ways that it can be implemented without that issue.) I'd like it to work with my calendar. Tell me what appointments I have when I ask and add appointments when I tell it what to add.

If the Echo can work with my Pandora station there should be no limitation to working with my other accounts. Maybe in 6 months, I'll be writing another review to tell you about it.

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Last updated on June 2, 2015.

Who Wants In on the DRAFTApp Private Beta?

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This post is part of the #IwantDRAFT campaign with support from DRAFT, the app that uses crowdsourced data to help you understand and compare your portfolio, in partnership with Kasai Media. As always, the words and opinions, are mine and mine alone.


When I lived in Silicon Valley, I was fortunate enough to attend Finovate, a conference of financial companies, most of them very small start-ups. Companies like Mint and Lending Club cut their teeth there. I like to call that time in 2008 the Golden Age of consumer financial applications. As the years went on, companies seemed to put their focus on creating products that they could sell to banks. Those are great too, but they are a pain to write about. People can't use them right away.

Over the last couple of days, a new company, DRAFT, has used Finovate to launch a new consumer-focused application for tracking your money. It's 2008 all over again, and I mean that in an awesome way. They are opening up their private beta and all you have to do is give your email address to get in line.

So what is DRAFTApp? It's a mobile application designed to help you manage your money in one place. It

One of the most interesting things to me is the crowdfunding aspect of draft. You can see this in the image. It gives you not only your returns, but also a comparison with the top 10% of DRAFTApp users. This really shines when it comes to understanding the investment fees that you'll pay. I've seen hundred of charts about how fees greatly reduce investment returns... and perhaps I take it for granted that regular readers have seen some of them as well. Of course DRAFTApp highlights this as well.

I will be signing up for DRAFTApp just for this alone. (I'm going to bring down that Top 10% average... ha ha!)

One thing that I won't focus too much on is the investment returns of the top 10%. By definition 90% of people are going to be disappointed in it. I had significant money in Europe, which didn't perform well last year. I know my performance is going to be disappointing. I want to be careful to not let this disappoint change my diversification to chase winners.

That said, it is refreshing to have other options than just a comparison of my portfolio to the S&P 500. Many tools use a few basic indexes and in the last year, I didn't compare well with that either. In most cases your portfolio isn't an index, so I find such comparisons odd anyway.

There are a few more features that I could highlight, but I think part of the fun is discovering them on your own. So why not join the waitlist and give it a shot? You've got nothing to lose

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Posted on May 14, 2015.

Book Review: Failure to Launch No More

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I usually start every book review of mine with an usual disclaimer... I usually don't like reading books. My reading speed is extremely slow and I'd prefer to have all the information distilled into 10-20 pages rather than 200 or more.

I often come away thinking that the cost of reading the book is not actually the money spent on the book, but the opportunity cost of my time to read it.

The book I am reviewing today is different.

Failure To Launch No More by Martin Dasko is well worth your time to read it.

I read it in around two hours... as I was doing a little multitasking.

What about the cost of the book? As a fan of the awesome Studenomics website, I subscribed to his mailing list. Dasko sent out an email about a number of things, but in it he mentioned that the Kindle price was a "damn buck."

The price is a little more now, but my thinking still hasn't changed... if you don't have a couple of hours and a couple of damn bucks lying around, just quit trying to launch a company or sell a product.

Since there's little cost, the next question is, "How good is the book?"

The short answer is that it is very good if you read it in the right context. It isn't trying to be How to Win Friends & Influence People or The Power of Habit. Don't expect something that was painfully researched in detail for years and years. It is designed to get you motivated to get off your butt and launch your business... with a focus on practical advice.

I'm usually not into motivational books. They seem to be heavy on "follow your passion" and telling you what you want to hear. Failure to Launch No More takes a practical approach to starting your business. It forces you to look at your financials to see if you can actually live while you are getting going.

My favorite part of the book came early on. Who do you get advice about your business from?

Many people turn to family or friends, but they can be terrible resources. They discourage you from taking a risk so you don't get hurt. Or conversely they may overpraise you, setting you up for disappointment times get tough.

I often write about multi-level marketing/pyramid schemes and people often look for advice here too. In most cases family and friends give accurate advice to stay away. Thus from my perspective I was ready to say that Dasko gives poor advice.

He follows it up in the book with who you can get great advice from. It is suggested that someone with no vested interested in your success or failure is usually a good sounding board. He takes it a step further and says that you should listen to critics:

"We need to hear the truth sometimes. Thank a critic for being honest."

This is the kind of practical advice that goes beyond the simple motivational speaking to get that project launched.

There were at least another half-dozen points in this book that I found enlightening. After nine years of blogging and doing a ton of research on these kinds of things, I'm very happy when I learn one or two truly enlightening things a day.

It is well worth it to read something that wasn't just re-hashing the same old crap... and even better that it didn't take all day.

If you've got a couple of hours and $10 you could go to the movies and watch people blow stuff up. Or for half the price, you could get some information to put you on the path to financial freedom. Suddenly, spending a couple damn bucks on
Failure To Launch No More seems like a good idea doesn't it?

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Book Review

Posted on April 20, 2015.

Cinch Financial Could Put Me Out of Business…

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... and I don't mind one bit.

This young generation has it so well. In my day, there were no websites to help you pick all the best financial tools. Of course, we had to walk uphill to class through 5 feet of snow (both ways!). And we liked it... we loved it!

My Grumpy Old Man is still a work in progress. I'm no Dana Carvey.

Nowadays, it seems there are new websites popping up all the time to help you with your financial decisions. I'd say that I get somewhere between 40-60 emails a year by companies.

However, a couple of weeks ago, I was contacted by one company who stood out from the pack. Yes they are based in the suburbs of Boston, and we know how I love the city of Boston. When I lived in Silicon Valley, I could throw a rock and hit a dozen start-up companies creating websites to help you with your finances. In Boston, there are very few.

The company that contacted me was Cinch Financial. They are new. It's rare for any new company to have everything figured out. It's laughable to compare what Mint was like in April of 2007 when I first saw their unreleased beta to what it is today. That said, there's a lot to like about Cinch.

Cinch gives you recommendations in four areas: credit cards, banks, mortgages, and auto insurance. They start with thousands and products and whittle them down based on factors like availability where you live, reputation, customer service, good deals, and more. It's worth watching going to their website to see the animation of all the companies disappearing through their screening process.

I particularly liked how they score credit cards. Instead of giving you a few hundred to look at like many credit card sites, they start at 2,300 and knock out 97% of them. So there are under quality "Cinch Pick" cards. Their software asks what's important to me and directs me to the appropriate cards.

So How Does it Work in Practice?

When I took it for a spin, it recommended three cards for me. Two of them I already carry in my wallet. The third was essentially an equivalent to what I already had. In fact, I'd recommend that card to my own mom. (Seriously. Mom, it's the Citi Double Cash Card and it beats the Fidelity Retirement Rewards card by Amex I use because you can use it in more places. It'll give you the equivalent of 2% cash back on everything you buy.)

I couldn't ask for it to do any better.

With banking, it suggested Capital 360 and Ally Bank. I have heard good things about both. However, I'm not moving away from USAA any time soon. I asked why USAA wasn't recommended and it was because you have to be military to be eligible and their software wasn't quite at the level of asking that at this early stage.

I wasn't looking for a mortgage and the tool didn't mention refinances, so I didn't give that software a try. I did notice that there were no Cinch Picks yet in my state. The auto insurance also lacked Cinch Picks. I'm happy that they up-front with an "I can't help you" message rather than just passing me to a nationwide company that may be less than ideal.

That brings me to an important point. They could easily have recommended Geico after Geico dropped off a bag of money on their door and I don't think anyone would have batted an eye. However, on the front of their website in the center they make it quite clear, "We only show you the best financial products, and we don't get paid by the companies on our site."

An obvious question would be, "How does Cinch make money?" Typically companies such as Mint and Credit Karma do make money when they refer you to a finance service. In my experience, those companies send people to sound, reputable financial services such as an American Express credit card or Vanguard brokerage services.

Cinch doesn't make this way. The person I was talking said, "Today, we focus on building the best possible product and user experience, and we figure the revenue model will become clear once we have something that users love."

BillSnap: An Interesting Feature

They have a feature called BillSnap where you take a picture and upload it to the website. They analyze it and tell you how you can save money. It sounds good in theory, but I'm going to reserve judgment for a few reasons:

  • Is It Helpful? - A number of bills like utilities can't be negotiated that much.
  • What About Privacy? - I don't know if I want them to be reviewing my purchases. Are they going to give me lifestyle feedback such as "Hey you eat out too much?" What if a rogue employee got the account number on a credit card and was able to use it? They would likely need security codes and expiration dates to do any serious harm. However, there's a reason why I (and many, many other people) shred their bills. It feels like it defeats the purpose to upload them over the Internet.
  • What are Paper Bills? - Cinch suggests uploading mortgage and insurance bills. I have put insurance bills on auto-pay and paperless statements long ago. My mortgage is also on auto-pay, but I do get statements every month because I want to see the progress made. This leads me to...
  • Is Any of this Going to Help ME? - I'm not the typical Cinch client. I'm weirdly obsessed with personal finance and I know that. So am I going to upload my 15-year refinanced mortgage at 2.75%? I just wrote 600 words on why switching from Straight Talk to Cricket Wireless may save me 8 dollars a month (article not published yet).

    Someone else may get good value from the BillSnap feature and maybe I would under the right set of circumstances. For me, personally, getting a bill to test and any privacy concerns outweigh the value I expect to receive. The average consumer will be different, but these are the kinds of things I think about. (See, weirdly obsessed with personal finance.)

I'd love for a reader to try out the BillSnap feature and tell me how it works. If you do, please contact me.


I saved what I liked best about Cinch for the end. You don't have to login or create an account. It is probably helpful to create one to save your progress, but I could get a bank recommendation quick and easy.

The most interesting thing for me is that they are focusing on creating value and growing mindshare. I think when you do that and help people, you'll find that the opportunities for money will follow.

The only problem I have is that if Cinch Financial is successful, they might not need personal finance bloggers like me to review banks and brokerages. I'd be happy with that outcome, because it means that everyone is great service.

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Posted on March 18, 2015.

Amazon Echo Review

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Late at night on Christmas Eve, Amazon Claus dropped off a mysterious gift at our house. It was raining and the box was a mess of wet cardboard. I opened it up and was pleased to find the box was simply black with no markings of any kind. It was perfect to slip under the tree as it was.

The wife didn't know what it was... for that I was thankful. She is not a fan of my electronic gadget purchases (remember “You bought a $60 Ball?!?!”). I could only imagine what she'd say about this.

"This", of course is the new Amazon Echo. This reviewer explains it best as a "Tower of Siri." It's not really Apple's Siri, since it is Amazon, but it is kind of like Siri. You ask it stuff and she answers it or performs the task.

Since this functionality comes for free with any major smartphone, I could only imagine how the conversation would go when I said that I paid $99 for it. I prepared myself with arguments based around how it would help our sons develop speech as he's just starting to really pick up a lot of words at 27 months.

However, a strange thing happened, something that never occurred to me. My wife LIKED the Amazon Echo. I needed no explanations or defenses.

In my opinion it is perhaps the most interesting technology since the tablet. Quite honestly, I find it more interesting than tablets were when they were introduced. I think a lot of it comes from the fact that I have degrees in computer science and linguistics. Amazon Echo combines both of those disciplines with its speech recognition and its syntax and semantic parsing of instructions.

Unfortunately, right now the Echo is very limited in what it can do. It answers simple questions like "What's the weather?" You can ask it to define or spell words and get answers. However, the most useful thing thus far for me is the access to the Amazon Prime's Music library. I simply tell her to play Aerosmith and I get Aerosmith. I tell it to play The Doors and I get The Doors.

The downside is that the music is only as good as Prime's library. I tell it to play Weezer and it played one song before quitting. It would be great if I could hook in other music sources such as a library stored on my computer or even Pandora, but neither of them is available yet.

The technology isn't perfect either. I asked it to play Liz Phair and it proceeded to look for a music "list" called "fair." It couldn't find that. I worked around this by asking it to "Play music from the artist Liz Phair." That worked much better. When I don't have the television on, it picks up my voice from 20 feet away. When I have the television on, I can be 5 feet away from it, and it won't hear me. I'm hoping this gets improved over time.

The Echo has been reviewed by a few technology sites and most say that the speaker is nothing special. I don't have top of the line JamBoxes or Sonos systems in my house. I'm not an audiophile by any definition, but it sounds good to me. My wife didn't have any complaints about the sound either.

I'm hopeful that there will be an application that I can run on the computer that controls my television. It would be great to tell Alexa to play certain movies or switch channels. It would also be great if it could control the NEST thermostat in my house. I think this integration will come, but it will take a little time to iron out all the partnerships.

Final Thoughts

I've read a number of reviews of the Amazon Echo. They are all over the map. Some say that it is a solution looking for a problem. Others say that it is "a perfect 10" such as the ZDNet review I mentioned above. I think both arguments have merit. Currently, Echo is limited, but what it does, it does extraordinarily well.

As much as I hate to admit it, so much technology complicates our lives. The complexity has seemed to give it more points of failure. Every new gadget seems to require a learning curve. Amazon's Echo is fairly unique in that it strips away complications. Except in rare cases (such as the Liz Phair one), I don't have to think about how to get it to do what I want. I simply ask it to pause or resume music. I never looked up whether these commands would work... I just tried them and they worked.

I'm not sure if you should buy it or not. If you are an Amazon Prime member, I say it's certainly worth the $99. I think you'd nearly pay this for the quality of the speaker itself. If you are not, and it is $199, I'd say that it early adopters will probably like. The general public might want to wait until it can do a few more things.

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Last updated on December 31, 2014.

Things I Like: Amazon Fire TV Stick

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It seems like has been forever since I've done a "Things I Like" article. I did a quick search and the last one was my NutriBullet Super Blender nearly 18 months ago.

Fortunately, a deserving product showed up at my door a couple of days ago: the Amazon Fire TV Stick. I like my tech gadgets, but it's extremely rare that one gets "wife-approved." The Fire stick is one such winning gadget. It's the exact opposite of the $60 Ball I bought.

These TV sticks are all the rage, ever since Google ChromeCast wowed everyone with it. These sticks allow you to Internet-enable your television. It makes it easy to watch Netflix, listen to Pandora, even play games. Roku and even even Mozilla Firefox have gotten into the act. So of course Amazon had to join the party.

I jumped on Amazon's Fire TV Stick when it was offered at $19. Now it is $39. I won't lie, the introductory price gimmick got me. Paying $20 today hurts a lot less than paying $40 in a week from now.

It also didn't hurt that I had a perfect use-case for a Fire TV Stick. My home has two televisions, one in the living room which gets most of the use, and one in the bedroom that rarely gets used. The living room one has a computer instead of a cable box eliminating cable box renting fees. The bedroom has the coaxial cable plugged into it. It's essentially "good enough" considering how little we use it.

On rare occasions, such as when one of us is sick, the television can get a lot of use. For not a lot of money, and no additional subscription fees, there are now a ton of movies available via a handy remote control. Now if my wife gets sick she can watch a whole season of Orange is The New Black while she gets better I serve her chicken noodle soup.

We are more of a Netflix family than an Amazon Prime movie family. I think it's because I never know what's going to cost me more money on Amazon. With Netflix, I know there's no pay-per-view. With Amazon Prime, I could see a movie, click into it, and find that it costs me money to rent (or in some cases buy) it. Of course Amazon wants to push these purchases and, as you'd expect, they give their own movies and television shows most of the screen real estate. However, it's easy enough to go to the Netflix application and use that to watch whatever I want to.

I found a couple of interesting things with the Fire TV Stick that are worth mentioning. The recommended movies, at least to start, seemed to be those late night Cinemax adult movies. I don't know if everyone gets this or if it's just what Amazon thinks of me. (Thanks Amazon.) Maybe Amazon knows it's a bedroom television and is giving my wife and I a subtle hint. In any case, my wife found it very weird. She quickly found the more mainstream movies.

The other thing that is worth mentioning is that there are a number of applications that I haven't gotten a chance to try yet. There's Plex, which is a media server. I have it on my living room computer/television, so there's the chance I can stream videos upstairs. It's a little more research to see how that works. There's a Pandora app as well that I want to get set-up. It'll be handy while I do laundry (on the list for later today) or maybe even when I'm in the shower.

You can do most, or perhaps all, of this stuff with ChromeCast or Roku. Google's ChromeCast is even a little cheaper than the current $39 Fire Stick price. My friend had an issue with ChromeCast's wifi. I don't remember the exact issue, but it was something about it not working at the 5ghz that the rest of his gadgets did, or the 2.4ghz getting blocked with baby monitors/wireless phones. In any case, he couldn't use it. Amazon's stick is a more advanced processor and has more memory, so I presume it is a little snappier. Roku's stick is about as expensive as Amazon's. I'm sure it is great, but for a cheapskate like me paying $19 made it an impulse buy vs. $35 or more the competitors. In hindsight, it is probably well worth that money... I just didn't realize it until I used it.

And that's really the weird thing about this review. At $19 the Fire TV Stick is a screaming buy if you have a use case for it. At $39, it is a fair price for the functionality and probably a very good purchase... but psychologically it feels "expensive" given the previous much cheaper price.

So what do you say? Buy or don't buy? Let me know in the comments.

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Posted on December 3, 2014.

Tiny House Nation – The Best Show You Aren’t Watching

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Back in September of 2007 when people blogged on stone slates, I wrote an article, Get Rich by Thinking Small, that covers the idea how living in a very tiny house could jump start you to financial freedom.

The idea is that living small has fewer expenses. You don't require as much land. It has fewer building materials. You pay less in taxes. In some areas of the country it wouldn't be crazy to pay it off in a few years eliminating most people's biggest expense, their mortgage or rent payment.

So it was with great interest that I saw that the FYI network was airing a show called Tiny House Nation. (If you haven't heard of the FYI network, I don't blame you, it's a rebranded Biography channel.)

I've always been interested in tiny houses. I'm fascinated by the really intelligent design used to make almost everything serve multiple purposes. They are a model of efficiency. In some cases, they can be too extreme to a fault like someone spending 20 minutes to get the last drop of ketchup out of the bottle. Still, I think there's a happy middle ground.

I'm so enthralled by tiny houses that when finishing our basement, I'm thinking about using some of the tiny house ideas to maximize the space.

Tiny House Nation focuses on a family looking to live in a tiny house. They seem to have different reasons. One show it was about financial freedom... it was the best way the couple could see living on one income. Another show focused on the family's love of the outdoors, so they didn't need a big house. Yet another show focused on a traveling nurse who needed the flexibility to bring her home and her "work from home" husband with her. It's a good mix.

I particularly like how the conflict isn't contrived. If you watch a home flipping show, there's always some surprise expense that "dooms" their budget only to find that in the end, they make tens or hundreds of thousands of dollars on the flip.

On Tiny House Nation, the challenges are real. How do you get a family of four to live in less than 250 square feet? How do you deal with their two dogs? How do fit a recording studio, which is necessary for a person's business? How do you fit a full kitchen and full bathtub in such a small space? How do you deal with the psychological ramifications of being at maximum 10 feet from your significant other?

Not to give any spoilers, but at the end of the show, you find that not everything comes up rainbows and puppy dogs. I think they are always happy to have made the tiny house decision, but you see the compromises that people make. They aren't usually big compromises, but it is a lifestyle change.

Finally, the show tours other tiny homes and shows off the innovations that they have. For example, they covered the apartment of That means you get to see the best of the tiny houses while they are constructing the tiny house that the show is focused on. It's a nice win-win.

Maybe after a dozen episodes the formula will get old, but they've only aired a few so far. Set your DVR for Wednesday at 10PM like I do... and let me know what you think.

P.S. While I love tiny houses, I'm clearly crazy as I can take the completely opposite view and go for a "Monster House" if it's priced at a good value.

P.P.S. One of the reasons I blog, is to create a journal for myself. When I look back to that Get Rich by Thinking Small article, I suggested that an 1800 square foot house would be a good fit for us. Two children and a big dog later, we live in a house that is exactly 1800 square feet. I had forgotten about the article at the time.

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Posted on August 12, 2014.

How Much Money Do I Need to Retire?

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That's the title of the book that Todd Tresidder gave me at Fincon 13. I was so excited to read it that I churned through it on the flight home. Many months later, I am finally putting together the book review. That's how busy I've been with the new baby. Let's hope my memory is good enough to do the book justice.

At first glance, the book's size and scope reminded me of Mike Piper's Can I Retire? Piper's book is 100 pages, and Tresidder's is 120 including appendixes and his biography. This book is part of his "60 Minute Financial Solutions" series. I think it takes more than 60 minutes to really digest How Much Money Do I Need to Retire, but I'm a slow thorough reader and I was focusing intently on the details in order to write the review.

How Much Money Do I Need to Retire? is quite different from Piper's Can I Retire?. While Piper concentrates on investments, Tresidder's approach is more concept-oriented. In particular, Tresidder seems to advocate an unconventional approach that I've written about in my early retirement plan posts. I'll get into more details in that later.

How Much Money Do I Need to Retire? is divided into three parts or retirement models. However, in reading the book, it felt that there really are two distinct models. These models serve as blueprints for building a successful retirement plan.

The first model is conventional retirement planning. If you are a regular reader of personal finance, you most likely know what this is. The idea is to get a big nest egg of cash and draw from it, typically using the rule of 4%. Tresidder points out a number of problems with this method. The biggest problems center around having to make guesses at things you can't possibly know. For example, it is really hard to know what your expenses are going to be when you retire. Who knows what the cost of health care will be? As you get closer, it becomes easier, but from a distance, it is very much a crap shoot. The same is true with investment performance. Even if you retire at 65, you might need that money to last another 20 years. What's the rate of the return of investments going to be over that time? What if you live another 35 years instead of 20?

There are so many variables and any one of them can drastically alter any retirement plan. Even that 4% rule is coming under question. A small difference there makes a big deal in figuring how big of a nest egg you'll need. Tresidder does a much, much more thorough job of explaining this in the book.

Another alternative model is to use a cash flow model for retirement. Essentially the idea is to have enough money coming in from various sources to pay for your lifestyle. The money could be coming from dividends, interest, annuities, Social Security, income producing real estate, or royalties (for those in such fields). It can even be a business (or hobby business) that you can run somewhat passively or that you truly enjoy. If you have enough of these forms of income, you don't really need a big nest egg (granted you'll need a nest egg for dividends and interest, but not the others).

Sometimes it pays to be smarter and not rely so much on the terrible interest rates that banks are giving and put more emphasis on Lending Club where I'm getting closer to 7%. I'm not saying you should put $100,000 in there, but if you were to have similar returns, you could use that to passively earn around $7,000 a year (of which inflation would eat away some). If your bank is paying you close to 1% then you'll earn $1,000 a year (and inflation would likely put you at a loss). It's a big difference.

The other half of the coin is matching your lifestyle to fit this cash flow model. Keeping expenses down just a little makes a huge difference in one's ability to reach financial independence. You don't have to live his minimalist lifestyle, but if you are able to find happiness in the things money can't buy, you should be able to keep expenses down.

If your cash flow income passes your expenses... guess what? You can pretty much retire. You want to make sure that you are prepared for emergencies, but for the most part you don't need to have that big nest egg. You don't need to worry if the 4% rule will hold up. You don't need to worry about that burn rate.

Over the years, I've gravitated to this cash flow way of thinking about retirement. That isn't to say that we don't have 401(k)s and IRAs and we are still building up that nest egg. We are taking a hybrid approach that I will go into more in tomorrow's post.

Not to sound like the Dos Equis guy, but I don't recommend a lot of books, when I do I'll be recommending How Much Money Do I Need to Retire?

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Book Review, Retirement

Last updated on March 2, 2014.

Confessions of a Professional Blogger Reviewed (Book Giveaway!)

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If I've said it once I've said it at least a half-dozen times, I don't like to do book reviews. I have about 1.2 gigabytes of reading a day from the internet, so the last thing that I look to do is read a book. I'm also not the fastest of readers. It adds up to spending a lot of hours of preparation before I can even sit down and write the book review.

However, when I saw that Miranda Marquit was running an Indiegogo campaign to support her upcoming book, I was intrigued. If you don't know Marquit, you probably don't read too many personal finance blogs. She's written for so many of them, that she's become almost synonymous with personal finance blogging.

Before I get to her book, Confessions of a Professional Blogger, I have my own confession to make. We have traveled in different personal finance circles for years and only briefly crossed paths in one small email chain back in 2008. The Indiegogo campaign gave me an opportunity to support her work, which was my way of saying, "Thank You. I See You."

That introduction opened the door to meeting her at Fincon, an annual personal finance blogging convention. And that led to us coming to agreement where she'll be contributing a couple of articles a month here.

It's Networking 101, but more importantly it is an example of how seeming small gestures can lead to big things.

With that little bonus out of the way, it's time to get to the book review itself. I initially thought the book was going to be how to run your own blog (getting a domain name, installing a content management system such as WordPress, designing a theme, getting plugins, etc.). I was wrong. Then I thought it might dish on some dark practices of bloggers such as ridiculous SEO articles like this one. This was a little closer but I was wrong here too.

It is a book mostly about being a freelance writing for blogs. If you are looking for a guide for how to make money writing articles for people with successful blogs, it is a must-read. Confessions of a Professional Blogger walks you through the whole process of getting recognized, building up a resume, deciding on which jobs to take, and more. What I liked best about the book was the pragmatic approach. Sometimes you have to pay the bills and sometimes that means taking jobs a little out of your comfort zone. As you get experience and recognition, you'll be in a better position to turn down less desirable gigs.

The book extends beyond blogging and even freelance writing by giving advice on the business itself. For example, there's an excellent section comparing the differences between owning a blog and writing for a blog. It's been a long time since I've written about all the things I do running a blog, but there is a huge difference between that and writing for a blog that someone else owns. Each has their own pros and cons, which are well-covered in the book.

That said, there's a lot more to writing than just pumping out a few articles. Marquit coves that in detail as well.

Finally, I really liked various part that dealt with... ummm... I'll just call it "life." Some examples:

  • There is going to be a time when writing or blogging doesn't come easy. When you reach that point, should you quit, outsource some help, or find another solution.
  • What do you do when you realize that there are 10,000 articles about how to save money on gas? (Hint: you need to add your own spin.)
  • How do you manage cash flow of getting paid by different publishers on different schedules? What kind of business trade-offs do you make to ease the bumps of collecting money?
  • How to be more productive, from planning your posts in advance to something that you wouldn't expect (in this kind of book)... eating and sleeping well to keep you in top form.

It might sound like the book is 1,000 pages, but it is quite a quick read. It's a great accomplishment to be able to fit all that information in a small space. As a professional blogger, I'd like to say that I knew everything in there, but I still learned quite a bit. Specifically for my situation, I learned about what I can do to create a good work environment for my writers if I really go full multi-author blog someday.

If you ever thought about making money online and didn't know how to get started, this book will build a foundation and get you headed in the right direction.

Update: I've been able to work out deal with Marquit to give away a book to one reader of Lazy Man and Money. To enter, leave a comment here. The better the comment the more likely I am to give you a few extra entries. (I like to reward those who create or add to the conversation vs. the "give me book" grunts in the comments.) The last date to enter is Feb 16th, 11:59PM. Contest is open to those in continental US (as I'm not sure that Marquit is willing to ship the book to Fiji).

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Book Giveaway, Book Review

Last updated on February 10, 2014.

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