Another One Bites the Dust

In December, 2008, a wine bar business, which a friend helped start up, went out of business, a victim of the great recession. The owner could no longer get the funding needed to sustain the business during the downturn. Rather than continuing to lose money every month, the owner closed the business.

Just last week, another business started by someone I know closed it doors for a final time. It was a franchise business that was opened in early 2009. I had met the owner in 2007, at a networking event, not long after I took early retirement. I promised that I would visit his restaurant when it opened. Unfortunately, it took nearly 18 month for him to get the permits needed to start the business and by then, the great recession was underway. Thus, he was never able to build up the clientele to make his business a success. By the time I got around to visiting, it was the restaurant's last day, after only being open for 9 months.

To me, it appears that small companies with lower financial backing and inability to easily tap financial resources are choosing to go out of business, versus continuing to lose money. 2010 will likely be a critical year of survival for many small businesses. It is unlikely that stimulus programs, such as tax credits for new hires, will be enough help these companies. Hopefully, the economy will recover sufficiently to give these businesses a fighting chance.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or business advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

My Impressions of the State of the Union Address

Although I only listened to a few minutes of President Obama's State of the Union address, I still came away with several impressions that are listed below.

He's is still campaigning rather than governing. President Obama is a great campaigner and it is understandable that he would want to rely on his strengths. To me, his State of the Union address sounded like a campaign speech, as he pointed out the reasons government wasn't working. Interestingly, Mr. Obama doesn't seem to realize that as the incumbent, he is part of the reason government isn't working. To him, it's the rest of government that is the problem.

He's right about the deficit of trust. Although Mr. Obama is an eloquent speaker. I was skeptical of his campaign speeches when he was was running for office. I felt that his history of accomplishments did not have enough substance to support his positions. After watching him ignore promises of bipartisanship, elimination of earmarks, reducing the power of special interests, I no longer trust any promises made by President Obama. He has mislead me too many times already.

He doesn't have a clue about business and the economy. From the stimulus package to the tax credit for new jobs, government has put funds against short term crutch solutions instead of sustainable high impact solutions. What was needed was an economic environment that offered stability and allowed businesses to confidently invest in the future.

For now, President Obama's performance has as been poor relative to my expectations of hope and change, with which he inspired voters. Hopefully, in his second year, Mr. Obama will change my impressions by working on substantive bipartisan solutions to put our economy back on track.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or policy advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

A Personal Finance Perspective on the U.S. Budget

It's challenging for me to get a good feel of what changes to the U.S budget means, because I don't normally work in billions and trillions of dollars. To get a better understanding, I decided to loosely translate the 2010 U.S. Budget, deficit and proposed spending freeze by President Obama into a hypothetical person Ima Spending. Scaling to U.S. budget to an individual level, here is my estimate of Ima's financial position:

Annual Income: $23,000

Annual Spending: $35,000

Annual increase in Debt: $12,000

Annual savings from Spending Freeze: $250

From my perspective, Ima needs more revenue, less spending or both. Since increased revenue is not easy in today's economy, I would work on reducing spending. Unfortunately, a spending freeze does not offer a noticeable reduction.

I'm glad I did the calculations to reduce the numbers to an individual level. Thinking in terms of thousands, instead of billions and trillions, have helped me understand the U.S. budget issues a little better ;-)

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial or policy advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Links To Carnivals From January 18 - 25, 2010

Here are the links to the Carnivals in which My Wealth Builder participated from January 19 to January 25, 2010:

Money Hacks Carnival #100

Money Management #2

How to Invest #2

Baby Boomers Blog Carnival #23

Carnival of Financial Planning #125

The BoBo Carnival of Politics

Carnival of Money Stories

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, investment, retirement or political advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Remembering my Time is Precious

Recent events have caused me to reflect on how precious is the time that I have. First, time is a resource that we can't get back. Once it passes, I cannot get it is forever gone. Second, I will never know how much time I have left, although I plan to be around for a while. Therefore, I want to make sure that I get the most out of the time that I have. Here are some of my thoughts:

Spend time with those important to me. Most of my 20s through 40s was spent with people in my outer circle, e.g. colleagues, service providers, and acquaintances. I spent a relatively small fraction of time with family, since I was single until my late 30s and lived away from my hometown. Even after getting married, I initially still spent a significant amount of time devoted to my career.

Then in 2006, my father passed away. Until my dad became ill, I never consciously considered that my parents would be gone someday. And then he was no longer there. It's been four years and I still miss him very much. I wish I had spent more of my 20s through 40s being with him.

I decided to consciously spend more time with my inner circle, e.g. family and close friends. In 2007, I took early retirement. I now spend the majority of time with my inner circle, and a relative small fraction with my outer circle.

Make the moments count. It's not enough to spend time together. I want the activities to be exciting and fun. I want everyone to be present and engaged. Just having a family in front of a TV doesn't count.

We've started to develop a set of engaging family activities, including annual vacations, game time, reading time, learning activities, and outdoor entertainment (e.g. fire pits, sports, and riding bikes).

Have no regrets. When I look back, I don't want to regret the time I spent or the time I missed. On my deathbed, I know I won't say, "I wish I had spent more time working." Also, I don't want to say, "I wish I had done more of _______." Of course, this requires planning which isn't one of my strengths. I probably should start with a list of 20 things I'd like to do :-)

Although I will make a little less, I have cut back on my hours for my main seasonal part-time job. I am working 33% less hours than last year, and about 50% less hours than my first year after early retirement. As a result, I will have more time with family, doing fun activities and with no regrets.

For more on Strategies and Plans, check back every Monday for a new segment.
Photo Credit: morgueFile.com, Michael Connors

This is not financial or personal development advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

It's the People's Government, Stupid

"...and that government of the people, by the people and for the people shall not perish from the earth." ~ Abraham Lincoln

In hindsight, I think President Obama's election win was all about the hope of giving government back to the people. Many Independent voters were disillusioned with President Bush and the Republicans. They believed in Mr. Obama's promise of bipartisanship, elimination of earmarks and reducing the power of special interests. Instead, I've seen hyperpartisanship, proliferation of earmarks, and significant catering to special interests be the standard of President Obama's first year. To paraphrase Rahm Emanuel, the Obama administration let a good crisis go to waste.

Hopefully, a new class of candidates will arise for the 2010 midterm elections, candidates that realize the people want ethical, holistic and principle based government. Here are a couple elements I'd like these candidates to support:

Bipartisan solutions. I believe all sides have valid points that need to be incorporated into a solution. For example, I agree with health care for everyone, but not at any cost. For me, a successful program needs to be fiscally sound and require personal responsibility from individuals also.

Elimination of earmarks. This form pork has become the norm in our legislative process, essentially buying votes instead of investing effort to create a better solution. Eliminating earmarks with cause legislators to focus on the real issue instead negotiating more benefits for their constituents.

There are many problems that will need to solved in the next few years, including the decreasing deficit, reducing entitlements, broadening health care, and saving social security. I want politicians who will serve all the people when developing solutions, versus serving special interests through backroom deals.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or political advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

My Incentives to Work in Retirement

Prior to taking early retirement, my primary reason for working was to earn money for everyday expenses and savings. First, I majored in a degree (engineering) that would lead to a good paying job. Then, after a mediocre first 10 years, I refocused my career, began taking assignments and positions of greater responsibility, and advanced in level and compensation.

Since taken early retirement in 2007, I have worked several part time jobs, which are seasonal. While I still work for pay, the incentives for choosing the job are often other than money. Here are some of the non-money reasons for the jobs I have taken.

Personal interest. I've always had an interest in personal finance. The first part time job I did was a seasonal position in a financial service company. Since I'm good with numbers and the relevant financial concepts, I enjoyed doing the work, even though the pay was little more than minimum wage.

In addition, the company provides continuing education training for a small cost, saving me hundreds, perhaps thousands, of dollars each year.

Personal development. I may be retired, but I still enjoy intellectual challenges. A job that that enables me to learn new skills and use them is appealing to me. One of my part time jobs is with a small business that is a franchise. In addition to learning the skills to do the work, I've been learning about how a franchise business operates.

Intellectual stimulation and emotional satisfaction. I enjoy the variety of doing three or four different jobs during the year, which require different skills, customer interactions, in different industries. The jobs I do last between a couple weeks to four months. In most cases, I'm ready for the job to be over when the season is finished.

Jobs that leverage my personal strengths are very energizing. In addition, I like the satisfaction of completing a project, which happens frequently in a seasonal job.

Of course, the pay is still important to me, since I am trying to earn 20% of our retirement expenses through part time jobs to avoid outliving our savings. However, nowadays, pay is no longer the primary reason that I accept a job.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial, career or job advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

On Saving Children from Financial Mistakes

To me, financial expectations of young adults seemed to have changed significantly from the time I was in my twenties. From my freshmen year in college onward, I didn't expect my parents to take care of any non-education financial issues that I had incurred. Nor would my parents have taken care of them without my asking. In fact, I looked forward to showing financial independence as soon as I could, to the point of paying for almost all of my college costs in my senior year.

Nowadays, many parents take pride in saving their children from their financial mistakes. For example, I recently listened to a mother proudly tell how she reduced the several hundred dollars of overdraft fees that her son had incurred. In the next breath, she complained about how her son was planning to spend a significant amount to take his girlfriend to dinner. "Doesn't he realize he has no money in his account? He can't afford to take his girlfriend out. He better start looking at the free activities that are available."

While I think it was great to negotiate a reduction in fees, I couldn't help joking, " You know, he isn't too big to fail :-) Perhaps he would have learned something if he had paid the overdraft fees." Her answer was a brief, "Maybe I should have," and then returned to sharing other ways she has been a financial savior for her son.

In our case, I must plead guilty for saving our five year old daughter from her financial mistakes. Recently, she bought a card and then left it at the store. After telling her she may have lost her card and the money paid, I called the store and they located her card for us to pick up next time. For now, I think its OK to provide our daughter some help with her financial mistakes. She is still too young to grasp some of the basic financial concepts.

However, I have already started on some basics, such as opening a savings account and letting her pay for items with gift cards she has received. My next step is to let her spend some of the money she has saved. I'm not sure how well this step will go, since she is very concerned about how to replace the money she spends :-) Hopefully, our stepwise approach will allow our daughter to handle her own financial mistakes by the time she is in high school.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Links To Carnivals From January 12 - 18, 2010

Here are the links to the Carnivals in which My Wealth Builder participated from January 12 to January 18, 2010:

Boomers and Seniors News You Can Use

Baby Boomers Blog Carnival #22

Everything Home Carnival

Carnival of Financial Planning #124

The BoBo Carnival of Politics

Carnival of Money Stories

Carnival of Personal Finance

Tax Carnival #63

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, saving, retirement or political advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Want to Retire Early? - They Need an App for That

With the popularity of apps, I think there ought to be some to provide assistance in retiring early. Here are two hypothetical apps I would have found useful on our own early retirement experience:

i-Save - This app would automatically deposit 12% to 20% of net weekly, biweekly, or monthly net pay into a savings account for retirement. For more aggressive savers, it would automatically save 12% to 20% of gross pay. I determined this is how much I needed to save to meet my early retirement goal.

i-LiveBelowMeans - This app would answer Need or Want whenever considering a potential purchase. For us, building wealth required trying to buy only what I needed. As a start, I would err on the side of marking many items as want. For example, I would categorize cable/satellite TV and a personal cell phone as a want, which some might consider strict. On the other hand, I consider health insurance a need.

Of course, having apps would only be a beginning. For us, an enabler for retiring early was making these strategies into everyday financial habits.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial, saving or retirement advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC