Archive for March, 2008Filed under: World wide web, Video, Features, Social Software Untitled from Download Squad on Vimeo. At SXSWi 2008 we had the pleasure of speaking with Gary Vaynerchuk, wine connoisseur and host of Wine Library TV’s daily videocast. Gary, who is truly one of the most dynamic individuals we have ever met, spoke with us about the importance of loving your community, the power of on the internet video and the essence of “radool.”
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2008
 
Sovereign wealth funds, and their $3.3 Trillion arsenal.. VC’s & PE’s move overPosted by: in Raising MoneyFiled under: Raising money, Investments, Public or private? The late 1990’s and early 2000’s were the years of venture capital funds. 2006 and 2007 were the years of private equity funds. Gone are the multi-billion dollar club deals that were nothing short of the old leveraged buyouts. But 2008 and perhaps beyond might end up being the years of sovereign wealth funds. The Financial Times is reporting that sovereign wealth funds grew 18% last year as commodity prices rose and as foreign exchange reserves in Asia built up. But the raw dollar amount is astronomical….. $3.3 Trillion…. $3,300 Billion…. It looks like high oil and gold prices suck away dollars faster than they have the ability to be spent otherwise, plus all the goods that come to America and Europe from Asian countries has created a vast wealth transfer. That’s the new world, enjoy it or not. If you’d like to compare this $3.3 trillion figure, this compares to an estimated $13.79 to $13.86 Trillion total GDP according to the CIA’s World Factbook. It’s pretty tough to plunk down $10 Billion in a transaction because the size of that alone is massive. If they could magically place that much money each time, there would be enough for 330 investments of $10 Billion per transaction. Having $3.3 trillion in liquidity and being able to place $3.3 Trillion into raw investments is another issue entirely. If the U.S. needs help with those mortgages they will end up taking, maybe its time to pick up the hotline. The reality is that this would take thousands of transactions before that $3.3 trillion would be fully invested.
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03
2008
To sell or not to sell or what to sell. That is the question.Posted by: in Money General TalkFiled under: Ask WalletPop, Borrowing, Budgets, Debt, Home, Real Estate, Simplification, Wealth
Now here’s my input: It sounds like you’ve a plan Abe. However, I’d like you to think a tiny more about if you really want to sell that home. The market is down right now which means you probably won’t get your best selling price for it. Also, did you take into account that if you sell the home, you’ll lose your mortgage interest deduction when you file your taxes? That deduction loss will cut into the monthly savings you anticipate to get by selling. Although you won’t notice it month to month, you’ll feel it when you file your yearly income taxes. Consider also the upset that moving can cause. It’s expensive. It will disrupt operations. In the long run It could cost you more than you think.As much as it might hurt you, I’d still recommend that you take into account selling your Harley. Remember, they’re still making them, you can purchase another one some day. Is the bike regular transportation or is it just a pleasure ride? Consider it hard. If you sell the bike now, you can probably buy another one in a couple years. If you sell the home now it could be a very long time before you can buy another one. Is $300 a month worth that to you? Stop stressing about your credit score. For right now, it is what it is. Keep on a path of responsible buying habits and the score will slowly take care of itself. Besides, if you already own a home and you’re trying not to purchase things that you don’t need, what do you need a higher credit score for so soon? Ease up on yourself, be proud of what you’ve accomplished so far. Hug your wife and kids in your own home. Screw the credit lending companies. They have no idea what you’re really worth to us anyway. Finally, comprehend that most of the people in this country of ours live paycheck to paycheck just like you. Don’t let that bother you for a second. If your plan is to do what it takes to earn next week’s paycheck, no one can ask any more than that from you. Worrying about what MIGHT happen if you lose your job is just wasting your valuable energy. Forget about it. It might never happen. If it happens, you’ll deal with it then. So, here’s the short version: 1.)Decide if you really, really, really need and want to sell your house. 2.) Decide if you really, really, really, need to keep that bike. 3.) Focus on being financially responsible and let your credit score take care of itself for now. Filed under: Finance, World wide web, Features, Social Software, DLS Podcast, web 2.0 SXSWi 2008: Freshbooks talks to Download Squad from Download Squad on Vimeo. We’ve written about Freshbooks — the on the web invoicing system — before and have been massive fans of their approach and service. We were even more impressed upon meeting Saul and Sunir, two of Freshbook’s team members, at SXSWi 2008. Grant talked to Saul and Sunir about the service, the importance of community and traveling from Miami to Austin in an RV and stopping along the way to eat breakfast, lunch and dinner with customers. Filed under: Debt
But Hersh Shefrin, a professor of behavioral finance at Santa Clara University, told the New York Times about a new way of looking at debt. By paying off high interest debt as quickly as possible, you reduce the amount you’ll have to spend each year servicing the debt — freeing up thousands off dollars for other things, including conspicuous consumption, if you must. Think about it this way: If you have a debt of $1 thousand with an interest rate of 20% APR, you’ll spend $200 per year servicing the debt — without even touching the principal. But if you can pay it all off now, you’ll have an extra $200 per year to blow on collectible plates or $55 dollar video games. The emerging science of behavioral economics provides great strategies for improving your financial life. To lean more, check out Bert Whitehead’s book Why Smart People Do Stupid Things with Money: Overcoming Financial Dysfunction. Filed under: Debt
But Hersh Shefrin, a professor of behavioral finance at Santa Clara University, told the New York Times about a new way of looking at debt. By paying off high interest debt as swiftly as possible, you reduce the amount you’ll have to spend each year servicing the debt — freeing up thousands off dollars for other things, including conspicuous consumption, if you must. Consider it this way: If you have a debt of $1 thousand with an interest rate of 20% APR, you’ll spend $200 per year servicing the debt — without even touching the principal. But if you can pay it all off now, you’ll have an extra $200 per year to blow on collectible plates or $55 dollar video games. The emerging science of behavioral economics provides great strategies for improving your financial life. To lean more, check out Bert Whitehead’s book Why Smart People Do Stupid Things with Money: Overcoming Financial Dysfunction. Filed under: Debt
Debt consolidation programs and the like offer hope to some but for those looking for a long-term solution to financial problems, something more is needed: a focus on changing the behaviors that led to financial woes in the first place. Founded by participants in Alcoholic’s Anonymous, Debtor’s Anonymous offers a 12-step program and support group for people struggling with debt. Debtors Anonymous members are encouraged to keep track of each dime that they owe, spend and earn, based on a belief that many people who have problems with debt suffer from “terminal vagueness” and “compulsive inattentiveness” to their financial lives. For more, check out the website and the group’s book, Currency of Hope. If you think you may have a problem, try this 15 question quiz, and visit this page to find regional sites to locate a meeting in your areas. With over 500 meetings in the United Says and 12 other countries, you shouldn’t have to travel too far to find help. Filed under: Budgets, Debt, Shopping
I don’t need to have my credit card on hand to order the new Ipod when I can just punch my number onto the web. I’ve even got the expiration date and the CVV number in my head. It’s horrible being blessed with a photographic memory. That leads to the problem of overspending. It’s so simple to spend money with a debit card. You want to know what’s worse? My bank pays everything. All checks…all debits. Even if I’m about to go into the negatives. That has led me to some deep red numbers. My wife and I currently have direct deposit setup at work. It’s very convenient. I mean, the money is already there when we wake up in the morning. No need to go to the bank. No need to wait in line for hours, OK…minutes. It’s great. But maybe it’s too convenient. I’ve been thinking about getting rid of direct deposit. I think that having to drive to the bank and cash my check would have a positive effect on me. I believe that having all our cash in front of me will make me consider spending that same cash. Seeing a number on a computer screen is one thing, seeing your hard earned cash in front of you is another. Spending the money will be hard as well. When you see the money slowly going away, it makes you think a little more. I’ve become better at watching my spending. I don’t look at things the same way anymore. I don’t look at a Nintendo Wii game costing $50. I look at it costing 2 1/2 hours of work. My $100 trip to the casino costs me 5 hours of work. Looking at that makes me re-think what I’m doing. I bought Rock Band for my Playstation the other day. I spent about $160 on it. I thought about it later…that’s a full days work! I still spend way more than I should, but at the same time I’ve improved a lot. I actually went to Wal-mart with the intention of buying a video game. When I got there, I actually didn’t buy anything. It sounds stupid, but it was a huge thing for me. I came home really giddy and told the wife my accomplishment. She sorta laughed it off but she knew. Baby steps…baby steps.
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03
2008
Ask the Dolans: Should I pay off my daughter’s credit card debt?Posted by: in Money General TalkFiled under: Banks, Budgets, Debt, The Dolans Ken and Daria Dolan, America’s First Family of Personal Finance, answer your money questions every Friday. Dear Ken and Daria, Without our knowledge, our 23-year-old daughter ran up $5,000 worth of credit card debt on three different cards. She defaulted and now the collection agencies are coming after my wife and me. We could pay the debt off, but does it make sense to do that? Jay Ken and Daria Dolan offer advice on all of your credit card and debt management concerns at Dolans.com. Filed under: Debt
These two things are important to me because I obviously cannot do this alone. I look to the readers for support and help on my trials and tribulations. The readers here at Walletpop have been instrumental in helping me get to where I am now, even though I still have a LONG way to go. There are many other personal finance sites out there: Mint, Wesabe, NetworthIQ to name a few. I’ve signed up and used all those sites. Each one of those has it’s own strength’s and weaknesses. One thing that they’re missing is community. There is such a steep learning curve to financial issues, whether it’s figuring out which credit cards to sign up for, how to consolidate a student loan, how to go about getting a mortgage, what on earth an IRA is–whatever. Sometimes people can feel alienated by their lack of experience or their debt. There are countless other people out there that are going through the same things we could all learn from each other.That is where Debtsy fills the void. Located at http://www.debtsy.com, Debtsy, currently in private beta, fills the void that all those other sites seem to miss. They tend to focus on syncing with your accounts and automatic notifications and things like that. Those features seem redundant to me. The people who I have met on the web through personal finance blogging don’t need reminders or syncing utilities that are always out of date. They want simple tools to track their finances and more than anything else, community. I have been using Debtsy for 3 days now and love it. The site is under constant development so new features are being rolled out all the time. Think of Debtsy as the “Facebook” of personal finance. You build your page, add your accounts, you can even set goals for your personal finance goals. You can add friends and create groups to meet people that share the same goals/problems as you. As a community, everyone can help improve their situations. As I mentioned, Debtsy is currently in private beta; however, Debtsy founders have given me a select number of invites to issue out to Walletpop readers. To receive an invite, send an email to abelicio@gmail.com. |
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Our man Abelicio Padilla has been blogging about his personal financial situation and he has been seeking advice for making sound money decisions. I wrote this piece as my input into his situation. If you’d like more background before you proceed, 
Most of us look at getting out of debt as an exercise in restraint — giving up consumption to improve our financial situation. It’s the financial equivalent of eating a plate full of broccoli.
With the housing crisis, credit crunch, and slowing economy threatening the financial lives of Americans just getting by, a lot of people are looking for solutions to their debt.
Plastic is the devil. All of it. Whether it be plastic surgery or plastic credit cards, it is all evil. I’ve become so accustomed to using my debit card that I use it for literally everything. People tell me, “Just leave it at home,” or “Don’t use it,” but that’s hard. Especially since I have memorized the number.
Many people have asked me why I blog about personal things such as my money. My answer isn’t usually that easy, but it boils down to a couple things: support and networking.
