Beating Broke

Personal Finance from the Broke Perspective

Could You Give It All Away?

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There’s been a bit of publicity lately about The Giving Pledge, an organization started/inspired by Warren Buffett and Bill Gates that is aimed at the Forbes wealthiest 400 people.  They and the organization encourage the worlds wealthy to give it all away.  Or at least a majority of their wealth.

Reading about all of this brings up the questions.  Could you give it all away?  Would you?  Should you?

At the real bottom of this is a more important question.  Why do we build wealth?  What purpose do we give our lives that we strive to attain wealth.  In Warren Buffetts case, I think you could argue that he has always seen it as a challenge.  Bill Gates saw a technological breakthrough and found a way to improve upon it.  Again, a challenge.  The challenge is not usually about the money though.  Buffett saw the building of the businesses as the challenge.  He wanted to be a better investor than anyone else.  Mission accomplished, I’d say.  Gates’ passion was in geekery.  He wanted to build a better computer.  Also, mission accomplished.

Gates and Buffetts passions made them very rich.  And, since you can’t take it with you, it’s gotta go somewhere.  Both have chosen to give a majority of their wealth away.  Kudos to them.  But, would you?  Could you?

For me, I would like to think that I could and would give most of it away.  Since I don’t have any to speak of, it’s easy to say that.  Ask me again when I’m 50 ish. 😉  Many Christians would say that it’s the right thing to do.  Non-Christians will have a different reason.  Some would say that we have a moral obligation to make someone elses life better and to share the wealth.  Whatever the reason, I think it really comes down to doing good.  Most people are good by nature.  And doing good for others is in our nature.  That doesn’t mean that we all want to be paupers who volunteer all their time, but most of us are happy to share some of our spoils with those less fortunate.

What about you?  Would you give it away?  Why?

Check Your Car Insurance

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Way back in March, I mentioned that I was beginning to look into making some adjustments and doing some price checking.  Somewhere in between there and here, life got in the way and I wasn’t able to get it done as quickly as I would have liked.  I’ve finally caught up to it though and I’m glad that I did.

This story should be proof for the rest of you who don’t regularly compare prices on things.  Never assume that you’re getting the best rate.

Our car insurance had been with State Farm.  I have been a customer of theirs for close to a decade.  As of August (when the home owners insurance renews) I will no longer be a customer.  Why?  Because, what I found in my checking is that they were tied for most expensive auto insurance.  And the home owners wasn’t much better.  Of course, your results may vary and the insurance company for us isn’t necessarily going to be the company for you.  I know that when I originally signed up with State Farm, it was because the price comparison tool at Progressives website pointed to them as being the cheapest.

I find it ironic that the insurance company that we’re moving to is Progressive.  We’ll be moving our Home Owners policy to someone else.  Progressive was almost exactly 50% cheaper than State Farm.  50%!!!  In fact, the total for 6 months for all three vehicles that we insure was just barely more than it was for just one of them at State Farm.  That’s pretty incredible.  A bit of trivium; our new ins. agent mentioned that he’s moved 11 clients from State Farm to Progressive in the last month or so, and that about 6 Progressive clients have moved to State Farm.  I mention that to concrete the idea that the right insurance company for one person isn’t necessarily the right insurance company for another.  With all the variables that they take into account, it’s hard to say which will be better unless you do some shopping.

Another interesting note from the adventure.  Previously, I went to a State Farm agent and got my insurance.  This time, I went to an insurance agency.  They’re independent for the most part and have access to several insurance companies to quote from.  That makes it much easier to shop around, as they will do most of the footwork for you.  All you’ve got to do is check any companies that you’d like quotes from that the agency doesn’t have a relationship with. In our case, Allstate was probably the biggest one that the agency didn’t have to quote from.  I used Allstate’s online quote tool and found it to be on par with State Farm.

So, lesson learned.  Shopping around is good.  It can help you find the best deal when you’re buying just about anything.  But, if you’re buying a service, remember to shop around periodically and compare the service that used to be the best deal to make sure it still is.  You just might do like we did and save 50%.

Why are We so Clueless about the Stock Market

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Why are we so clueless about the stock market

By: Mariusz Skonieczny

Mariusz could have just as aptly named this book something like “The Beginners guide to the stock market” because that is what the book is; essentially.  He takes a very low level approach to the stock market in an attempt (I believe) to bring the chaos that is the everyday market to a much slower and easier to understand pace.

Even having read the book, and seen some of the examples he used, my mind is still having a hard time with it.  I’ve been so conditioned to see the stock market as this super-duper complex machine that only the smartest and best educated can even begin to understand.  And some of the elements of the stock market are that.  But, at it’s very core, the stock market is nothing more than an exchange for shares of companies.  The beginning of the book makes that abundantly clear.  It goes on from there, to explain some very simple concepts about earnings, e/p ratios, dividends, and stock price.

The book has a couple of failings, in my opinion.  One, it’s terribly short.  At 164 pages, it’s reminiscent of a “how-to” manual or very in depth brochure.  I also think that he took the concepts down to a too simple level.  I would like to believe that a company like Microsoft is similar to a lemonade stand, but I just can’t accept it.  Also, with as much explanation as he gives about the structure of business and the simpler indicators of a business’ health, it would have been nice to see him give a more in depth look at a few of the methods he uses for researching a company, as well as the use of various trading platforms or some of the best share dealing account UK trade brokers can offer.  He very briefly mentions a few, like annual reports, but it would be nice to maybe have examples of where in an annual report to find the information we need and also what form it might take.

The book gives a beginner the tools to understanding the basics of the stock market and to begin investing on the markets simplest level.  And I think that was the goal of the book.  Mission accomplished.  I would have liked to see it have a bit more information on the back end of the stock research and selection process.

Disclaimer: I was given a copy of this book by the author for review purposes.  If you’d like a copy for yourself, you can pick it up at Amazon.  Or, there may be a giveaway here in the coming months, so you could wait for that as well.