Beating Broke

Personal Finance from the Broke Perspective

What’s Your Personal Finance Dedication Level?

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100graphicwebreadyYou’ll hear me talk about it all the time.  Well, you won’t likely hear me at all, but read me write about it just doesn’t sound right. 😉  If you want to succeed at your personal finance goals and your personal life goals, you need to continually work towards them.  (Make some if you haven’t already)

And working towards your goals sometimes doesn’t get the required dedication that it deserves.  If you’ve set goals for your personal finance, but have never met one on time, you probably suffer from a low level of PF dedication.  If, however, you always meet your goals on time or early, you not only likely have a high level of PF dedication, you also need to set higher goals! 😉

In the course of my day to day life (and yours, I’d bet) I’m constantly tempted with things that I would like to have or places I would like to go.  And to get those things or go to those places costs money.  Money that might not be in the budget.  The temptation can sometimes be strong to put aside a budget item for this month so that you can have that “want” now.  Time for a self check.

It’s at times like that, that I try to remind myself of the goals that I have set.  That $50 gadget could be a $50 payment towards the next debt item in the debt snowball/avalanche/snowflake.  It could go towards retirement, or towards college savings, or towards down payment savings, or…  You get the idea.  Often, that little reminder is enough to keep me on track.

But it’s only because I’ve decided to have a very high level of dedication to my personal finance goals that it works.  If I had a much lower PF dedication level, it might not be so easy to turn down that gadget.  And I’d be that many more months behind schedule on paying off my debt.

What is your PF dedication level?  Do an inventory of the goals that you have set and decide now how much dedication you want to have towards those goals.  I’ll let you in on a little secret.  If you set a goal, you want it to be a 100% dedication item.  Maybe you don’t realize that, but (consciously, or sub-consciously) you created that goal with the intention of giving it 100% dedication.  And if you aren’t giving it the dedication that you intended for it, you’re letting yourself down.  And maybe it’s time to rethink your goals and set new ones.

Whatever the case may be, your dedication level to your goals is the deciding factor in meeting those goals.

image credit: Duchessa

The Higher Education Path Not Taken

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I’m not sure about you, but I have a hard time with keeping myself from constantly over-analyzing everything.  You name it, and I’ve analyzed it.  Even things that I cannot change, like my choice in Colleges.  Should I have gone to a different college?  Perhaps.

If I look at it from a strictly financial perspective, the answer is a definitive yes.  I went to Jamestown College, which is a private school.  While it isn’t the most expensive private school you can choose, it’s not nearly as affordable as a state school would have been.  Instead of the student loan debt that I am paying on now, I would have only about half of it had I gone to a state school.  Maybe less.

If I had gone to a school closer to home, I could have saved money over the summers by moving back in with my parents.  Traveling home would have been a far cheaper endeavor, and certainly would have been a shorter endeavor.  It’s over 950 miles from Jamestown to Hamilton, MT, where my parents live.  Even with the best car I had, mileage wise, it cost at least $200 to drive home and back.  And that’s without stopping along the way at a hotel.   And don’t even get me started on the money I could have saved on laundry by bringing it home and using the washer and dryer at home!

Of course, not every decision in life can be judged solely by it’s financial merits.  (Not that I was all that adept at anything financial back then anyways.)  Something as important as college has many factors that go into it’s choosing.  For me, the money did come into play simply because my family didn’t have much of it, and I needed to be able to get enough financial assistance to go to the college I chose.  I also wanted to play football, so the college had to have a team.  I’m not a big fan of lots and lots of people, so the school needed to be smaller.

Having had pretty good grades in high school, I was able to get scholarships and financial assistance to go to all of the schools that I applied to.  I had ruled out the main state schools as being too big.  They also got ruled out because I wouldn’t be able to play football.  In the end, the choice came down to a smaller state school, a private school closer to home, and Jamestown College.  All offered everything that I was looking for.  All were good schools.  What it finally came down to was friendliness.  Of the three schools I had narrowed it down to, only JC took the time have a enrollment counselor call me.  The football coach at JC was the only one to call me and personally invite me.

Sorry, I’ve gotten off on a tangent, and it’s turned into a bit of a love fest.  But, there’s a reason for that too.  It’s the funny thing about college.  No matter where a person goes to college, the college they went to was the awesomest college ever!  It’s not about the money.  It’s not about the education.  It’s not about the faculty, or even the sports teams.  Those all play a part in the choosing of the school, but, really, play very little part, if any, in how you feel about the school.  No, the college you attend is the best school because of the people you meet, the adventures you have, and the growing up (hopefully) that you do while you’re there.

When I think back on my higher education, I can say that I got a good education, but I can also say that I could have just as easily gone anywhere and gotten a good education.  I was able to play a couple of years of football, and that was cool.  I could have played at several other schools too.  I certainly could have gone to a cheaper school and had less student loan debt when I was done.  But, what really made college, college was the people I met.  Either directly, or indirectly, through college, I met my wife, and made so many friends.  We had so many shenanigans!  And that is what made college worth every penny.

Let’s do something fun.  Tell us all what college you attended in the comments below.  Maybe we’ll find some fellow alumni!  (Also, I’m curious how many of you are Ivy League-ers. 🙂 )
img credit:pwbaker, on Flickr

Motif Investing

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How much do you know about investing?  If you needed to build a balanced, diversified portfolio of investments, would you even know where to begin?  What if you wanted to take advantage of a certain trend by investing in the companies behind that trend?  Could you do the research necessary to find those companies and pick the ones that are best suited to taking advantage of the trend?  Yeah, me either.

Motif Investing; Investing in Patterns

That’s where Motif Investing (affiliate link) comes in.  They’ve done the research for us.  They know how to build a portfolio of investments that is poised to take advantage of a new trend.  And, they’re sharing that knowledge.  They’ve created motifs that you can invest in.  In their own words: “A motif is a carefully researched and balanced grouping of up to 30 stocks that combine to give investors diverse exposure to a single big idea.”  But, what does that mean?  Well, let’s say you think the economy is going to continue to stink for the next several years.  You know that as the economy goes down, places where you can buy stuff cheaply do well.  How about a motif called “Discount Nation” that is an array of discount retail stocks?  What if you also think that when the economy goes down, things like gambling, alcohol, and tobacco pick up, and the companies that produce those things do well too?  The “Seven Deadly Sins” motif might be for you.  Check out the description they’ve given it.

Even in tough times, consumers continue to partake in things that may not be considered particularly virtuous. From cigarettes to sex, burgers to Botox®—consumer indulgences require products and services from a wide range of publicly traded companies. Some luxuries see reduced demand during tough times. But smokers could keep smoking, drinkers keep drinking, and the lustful keep…lusting. Bad habits are hard to break. And when times are rough, who wants to even try? Nobody can predict the markets, but consumers are only human. And economic conditions may not be able to defeat their appetites for sinful stuff.

Funny! You’ve got to have an account, and be logged in to see the individual stocks for each motif.  I couldn’t resist, so I signed up just to see what was in the “Seven Deadly Sins” motif.  It’s got 25 stocks in it.  I recognize almost all of the names, like Anheuser-Busch under the Gluttony category, and Sturm Ruger & Co. under the Wrath category.

Investing with Motif Investing

Motif investing might be something to look into.  It looks like they’ve got a pretty low minimum investment of $250 per motif with a fee of only $9.95 for the entire motif.  If you tried to replicate the above motif, you’d have to buy 25 individual stocks, and even at the $4.95 I’ve seen at a few discount investing houses, you’re going to spend a ton more to achieve the same diversification.  In a way, it’s a bit like an ETF or mutual fund, but without the added expenses of either.  Plus, unlike an ETF or mutual fund, you own the shares of the individual stocks, not the shares of the ETF or mutual fund.

The motifs are also customizable.  You can adjust the weighting of the motif to lean a little more heavily on one stock or another, and can even add or remove stocks to the motif to fully customize it to your liking.  Each gives you a simple way to buy a little diversification as is, or you can customize it to fit your liking.  I like that.

I don’t necessarily like that there is a minimum investment, but I’m sure it’s in place to keep their costs as low as they can. They also don’t reinvest dividends, which would be nice to see since they’re already doing fractional shares, but, I do like the fee structure.  $9.95 might seem a bit much, but when you consider that you’re buying up to 30 stocks at a time, it’s really a pretty good deal.  Plus, once you own a motif, you can sell/buy individual stocks within the motif for $4.95 a trade.  They’ve got IRA accounts available which is nice.

If investing seems like a big confusing mess to you, you might want to check out Motif Investing.  I like the idea, and having some knowledge behind the stock picking is always a good thing.  I’m not sure that too many seasoned investors will be picking up the idea, simply because most of them know how to do their research, and usually have a set way they go about investing.  Maybe I’m wrong, but that’s the way I see it.  It’s a cool tool for beginners.