Financial Goal Setting for the 2012 New Year

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Click here to enter my free $196 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is January 31st, 2012.


Happy New Year Everyone! It is that time again. That’s right – time to set my financial goals for 2012.

I do this once every year as part of my goal to create what author David Bach calls a Purpose Focused Financial Plan. The goal of this system is to employ money in your life in a way that matches your life values and dreams. It is a very cool idea!

You can read more about my journey to create this system and some examples of goals at the following links – Creating a Purposed Focused Financial Plan & My Personal Finance Journey’s Investment Strategy.


As is the case with many things in life, a good portion of financial goals are long-term commitments requiring attention in each passing year. As such, you might see many similar goals that I was trying to or did achieve in 2011 listed for 2012. I am perfectly fine with having some of the same goals year-to-year, provided that I believe in the causes they represent (which I ponder each year, and all of the ones listed below definitely do meet that criteria!). Nevertheless, I’ve tried to call attention to completely new financial goals for 2012 by highlighting them in bold red text for easier reading. 


So, here goes, the unveiling of Jacob’s 2012 financial goals. Enjoy, and I look forward to reading any comments you all have!  

How about you all? What goals have you laid out for yourself in 2012? What technique do you find is most effective in holding yourself accountable for your goals you set?  


Share your experiences by commenting below!

***Photo courtesy of http://farm1.static.flickr.com/138/341866875_a0e8c69f1e.jpg

Blogging Goals Update – 2011 Year End Review and Wrap Up

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Click here to enter my free $196 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is January 31st, 2012.

In January of 2011, I wrote a post detailing some of my blogging goals, targets, and dreams for the year of 2011. When I did this, I also added a reminder on my Outlook calendar to track our progress pertaining to these goals each month.

I have been sort of bad in that while I have been tracking these goals offline, I have not published an update on my blog in several months (only so many hours in the day, right?!).

My goal for today’s post is to rectify this!

By tracking blogging goals, I am hoping that it provides us with more accountability and visibility to what we are doing and where we want to go with this community/blog.


This post marks the last wrap up of the 2011 year that I’ll do. From here, it’s on to sharing my financial, personal, and blogging goals for the 2012 year! Should be a fun time!

So, here goes! The blog goals for 2011 were as follows, with progress updates given in bold type, current as of the end of December, 2011.

How about you all? What blogging/personal/professional goals did you set for 2011? Overall, how did you progress in achieving them?

Share your experiences by commenting below!

***Photo courtesy of http://www.dvq.com/main/4010icon.jpg

$196 Giveaway – Community and Charity 10% Monthly Blog Income Give Back # 4 – January 2012 Edition + 2 Year Blog Birthday Celebration

• 1) The readers – Obviously, without you here to read my articles and interact with my ideas, there would be no blog in the first place (let alone blog income). As such, it is only fitting that you receive a portion of any blog income.
• 2) Charitable organizations – If you’ve read my blog before, you know that I’m a big believer in donating a portion of my money to charity. Each year, I donate between 5-10% of my income to the National Multiple Sclerosis Society as part of the Bike for MS fundraiser that I do. Beyond the good that is done by donating your money, getting used to contributing to charity is also a good practice to emulate the actions of affluent individuals (T. Harv Eker discusses this in his book, Secrets of the Millionaire Mind, which I would definitely recommend reading if you have a few hours).

Like last month, I’ve decided to use the new RaffleCopter giveaway management tool to handle sign-up facilitation for the January giveaway, so simply go through the steps listed in the widget below to enter the running for the prize and accumulate entry points.

There is no limit to the amount of points you can earn. If you refer 10 subscribers – your name will have accumulated 170 entry points! Or, if you link to the giveaway more than once, you can accumulate those 7 entry points multiple times. You can also retweet the giveaway once per day. In the event of a tie, I will be using a random number generator to select the winner.

Important instructions: After you complete an entry method, make sure to click and fill out the “I Did This” or “Enter” button in the widget so that I have a record of your points.

Remember, the deadline for entries will end at midnight on January 31st, 2012 (a little over 3 weeks from today – the start of the give back). Good luck to you all! Please contact me if you have any questions. After the deadline for entries passes, the winner (one with the most points accumulated) will be contacted via email to receive their prize and select this month’s charity organization for the donation.

***Photo courtesy of http://stefanmarkov.com/family/images/yana_3yrs_1.jpg

Green Energy Makes Green Money

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The following is a guest post. Enjoy! 

With the cost of energy prices rising each year, many of us are tightening our wallets and looking for better ways to save money. One simple way you can save money is by choosing a green energy supplier today.Generating green energy can be extremely beneficial for the environment and a great way of saving money. There are many low-carbon technologies like wind turbines and solar panels available that use renewable sources of energy. This, in return, uses less fossil fuel and therefore helps to lower carbon emissions. Renewable energy is great for the environment, and the government is currently funding many financial incentives that will allow you to help reduce carbon emissions and increase your savings.

1. Reduce your carbon footprint

The planet is becoming increasingly polluted and you can help put a stop to this by using greener energy alternatives at home.

2. Solar energy

Solar energy can be captured by solar panels. Solar panels absorb the energy from the sun and transfer it to heat water. This may be expensive to begin with but in the long term it will save you a small fortune.

3. How big is your green energy venture?

Many families are generating their own energy at home. Based on your financial budgets, you can do this or go through commercial generation. Research about this topic today and see what energy deal is financially right for you.

4. Spread the green word!

Green energy benefits everyone and a great way of spreading the word is by getting the whole community involved. The local community can hugely benefit from renewable energy by reducing their utility bills and generating local employment.

5. Be a part of something special

Switching to green energy is extremely easy and quick and can minimize your carbon footprint by up to 33%. Go for a greener energy alternative today and help both your bank account and the planet you live in.

Green energy is the only way the planet can operate if it is to survive the threat of carbon emissions. The more we as a nation use renewable energy, the more we all benefit the eco-system, reinforce our energy security, create more local jobs, and help to better our economy.

My Year-End Current Asset Allocation and Net Worth Growth – November-December, 2011

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I have to apologize slightly in advance for this week being a little heavy in “progress” posts, as it has has been my “catch up” week in evaluating my financial goals (published Tuesday), net worth progress (this post), and blogging goals for 2011 (on the way soon). Also, on the way soon will be my 2012 goal setting posts. However, since I haven’t reported on these points in about 3 months, there’s definitely much to discuss! So, let’s get started.

As I’ve mentioned before, the goal of this running net worth progress series is twofold– 1) to share how I (as a fairly normal non-financial professional) approach various financial issues that come at me throughout life so that you can use my learnings to assist you in your financial decision making and 2) to make me more accountable in sticking to my various financial goals that I set forth by periodically evaluating my status and making adjustments. As always, if you have any questions, please ask!

Overall, the 2nd half of 2011 went pretty well. On one hand, I made a lot of progress towards my personal, professional, and blogging goals, but because of the lack of a strong stock market, my net worth really hasn’t moved much. In fact, in performing a quick 30,000 foot view of my net worth spreadsheet, it appears that it hasn’t moved at all from June to the end of December 2011!

As for November and December specifically, these were busy months with getting ready for the holidays, traveling, and also beginning to build a personal finance speaking service. More details to come about that project! However, they were also very fun months, filled with running races and seeing family/friends. 

As far as the overall stock market goes, the situation was looking fairly disappointing during the beginning of the 2nd half of 2011. However, since the last net worth update in October, the market has started to recover and is now in a more “neutral” position for performance in the 2H2011.  

With all of the up and down that has occurred, let’s take a look and see how it affected my net worth progress…shall we?

How about you all? How did you progress with your net worth in November-December 2011? What are your thoughts about the strength of the market right now? 


Do you think I should prioritize Roth IRA or Individual 401k contributions for the first few months of 2012 (see details listed above)?

Share your experiences by commenting below!

***Photo courtesy of http://s0.geograph.org.uk/photos/02/20/022053_8548f29f.jpg

2011 Year-End Financial Goals Review and Progress Update

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Along with signifying a new beginning, the time around Christmas and New Year’s each year represents a very special, almost sacred, occasion for me. It is a time when I put my normal life on hold and make the “pilgrimage” to my home-land of Arkansas to relax with my family for 1-2 weeks.

On this trip, aside from relaxing and having a good time with my family, I make sure to set aside time to tune out the normal distractions in everyday life – computers, laptops, cell phones (sometimes at the risk of annoying the girlfriend in not responding to her messages – oops!) – and reflect on the year that has just passed. I think about my accomplishments, my progress on my life goals, and how both of these things relate to what I want to achieve. These periods of deep thought often occur while I am sitting around the fireplace at my parents house (see picture below for an example of me relaxing with my cat, Cream).

And, since I am lucky enough to be quite a finance nerd, what usually materializes out of these reflection periods is a good list of financial goals for the coming year. 

However, I can’t start listing out new financial goals for 2012 (keep an eye out for that post soon!) before summarizing my progress on my 2011 ones first!

I’ve gotten pretty behind on these financial goal updates with the year-end craziness (the last one I gave was on October 18th!). As such, this post/update will serve to reflect new progress that has been made in the November-December 2011 time-frame. Enjoy! I look forward to hearing your comments, thoughts, and progress on your own goals.

To quickly review, back in January of 2011, I laid out my short term, mid-term, and long term goals for the 2011 year. I do this once every year as part of my goal to create what author David Bach calls a Purpose Focused Financial Plan. The goal of this system is to employ money in your life in a way that matches your life values and dreams. You can read more about my journey to create this system at the following links – Creating a Purpose Focused Financial Plan & My Personal Finance Journey’s Investment Strategy.

Overall, I’ve been very lucky in the regard that my progress in 2011, for the most part, met or exceeded the expectations I originally laid out at the beginning of the year. 


Short Term (< 1 year) Goals:

• Contribute $5000 (or $420 per month) to my Roth IRA with Vanguard this year (maximum allowed) – Complete. Have now contributed $5,000 so far this year. 
• Because my graduate school employment doesn’t include the perk of a 401k, I had thought that my tax-deferred investing options for 2011 were exhausted when I maxed out my IRA contributions earlier this year. 
• Because of this, during the summer time-frame, I began pouring any extra money at the end of each month towards my condo home loan. I made some great progress in building up equity in that investment. 
• However, in December, I was able to open up and fund a self employed individual 401k with Vanguard. I then contributed $3000 to this account (pre-tax. Nice!). This helped immensely in reducing my tax liability for 2011.
• Reach net worth target for this year (not displayed here) – Not obtained – the equity markets didn’t seem to want to cooperate in allowing me to achieve this goal, as it requires an ~20% increase in net worth. However, all in all, I can’t complain too much. 
• Maintain target 6-9 months of expenses in cash reserve fund in Dollar Savings Direct account –Complete – currently carrying ~9 months worth of expenses in cash in my emergency fund account.
• Rebalance mutual fund portfolio to meet asset allocation target %’s (75% equity, 25% fixed income overall) – Kept correct throughout whole year. Only rebalanced 1 time I believe. 
• Obtain 15% ownership / equity in condominium – Complete – currently, I have 18.17% equity in my condo. Almost time to be eligible to remove the private mortgage insurance when I reach 20%!
• Put together a will and have it reviewed by a lawyer – Will completed. Not yet reviewed by lawyer.
• Continue to save money for trip to Grand Canyon – Savings ongoing – need to continue to evaluate when to take this. 
• Currently, I have $470 saved up for this trip. I increased the monthly savings to $50 starting in October, and that has helped accelerate the savings nicely.
• Upgrade condominium with investment in stacked washer/dryer combo – $1000 for unit, $1000 for labor/installation – Decided to cancel this upgrade for storage space saving reasons.
• As of September, I officially had accumulated 1% of my home value in my home maintenance savings account. From then on, I began accumulating the $2000 that it would have cost to get the washer/dryer in my condo.
• However, I have since decided to hold off getting this washer/dryer since closet storage space will be at a minimum since my girlfriend and I have decided to move in to my condo starting in June 2012. 
• Invest $500 in MicroloansComplete! It was fun doing this in 2011!
• Donate $1,300 to Multiple Sclerosis Foundation in 2011 (5% of income) – Done. In the 2011 Tour de Vine event, I raised approximately $5625 to support finding a cure for this disease (with the help of company matches). My bike ride happened on June 11-12, 2011 and was a huge success.
• Save 3% of take home pay each month (after taxes) for Dream Account. On target – Have an automatic transfer each month from my Bank of America checking account to my ING Direct high yield savings account.
• $30 per month save for doing running races as part of health life values account – On target.
• $20 per month save for buying fresh vegetables as part of health life values account – On target.  If I don’t do this automatic savings, I can forget to buy fresh veggies and only buy canned ones! haha
• Save ~33% of blogging income (if any) in a high yield online savings account in preparation for 2011 taxes. Done – 4th quarter quarterly estimated tax payment sent in. 
• I’ll be sure to put together a future post on estimated taxes, as it is something that crept up on me without knowing almost in 2011. I did a good job estimating/saving for my blogging income taxes, but I did a VERY bad job of saving money for estimated taxes on my day-job research fellowship income. 
• Because of this, I had to pay about $1,500 more in estimated taxes for 2011 than I was planning for. Lesson learned!
• Implement dollar value averaging for my 2012 Roth IRA contributions. Canceled. 
• I’ve decided that dollar value averaging, even though it will produce a slightly higher return on investment, is not well suited for me in the long term. Explaining why this decision was made will be part of a future post.

Mid-Term (3-5 years out) Goals:

• Continue contributing $5000 to Roth IRA each year and using dollar cost averaging.
• Reach intermediate net worth target (not displayed here, but is 2X my current net worth)
• Own a rental property by 2016.

Long-Term (>5 years out) Goals:

• Obtain a net worth of $1,000,000
• Own a home free of mortgage payments
• Own a vacation home in the mountains somewhere remote
• Accumulate enough funds not have to work, but will probably anyways because I would get bored. 

How about you all? How have the months of November and December been for achieving your goals? What are your next milestones? Have you set financial goals for 2012 yet? 

How about you all? Share your experiences by commenting below!

Chaikin Power Gauge Stock Rating Widget – 3 Month Effectiveness Check-in and Performance Comparison

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $74.52 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is December 31st, 2011.

Three months ago, I investigated and reviewed a stock rating tool called the Chaikin Power Gauge Stock Rating Widget. At the end of the review, I concluded that even though the widget seemed to be very streamlined and easy to use, I didn’t have enough information at the current time to determine whether or not the Chaikin Widget was effective at predicting the movement of stock prices (in order for it to be used as the sole source of information in executing buying and selling stock actions).

As such, the purpose of today’s post will be to check-in on the performance over the past 3 months of 10 stocks I selected from the Dow Jones Industrial Average and compare that performance to the movement predicted by the Chaikin Widget overall stock potential rating 3 months ago. By doing this, I hope to get a feel for if this rating tool seems to accurately predict price movements of common stocks.

A Quick Review of How the Chaikin Rating Widget Works

Once you enter a stock ticker symbol in to the widget and hit the “enter” button, the following qualitative and quantitative details will be generated automatically for you on the widget. 

• The current trading price per share of the common stock.
• The Chaikin Power Gauge rating – “This rating is based on market expert Marc Chaikin’s back-tested 20 factor model, which has been proven successful at identifying a stock’s potential over the next 3-6 months.” I personally didn’t yet look in to the details about what 20 factors this widget takes in to consideration.
• Along with the overall Power Gauge rating, the widget displays the bullish or bearish levels of the following company details.
• Financial metrics.
• Earnings performance.
• Price/volume activity.
• Expert opinions.

When a stock was rated as “neutral,” the stock experienced significant gains (above 20%). When a stock was rated “neutral, trend down,” the stock gained a minimum of 1.55%, with double-digit gains often realized. A similar result from seen with the stocks rated as “bearish.”

Overall, the average % price change for the 10 stocks over the past 3 months was 15.46%. This trumped the % increase of 11.48% of the Vanguard Total Stock Market ETF (VTI) pretty nicely. However, the widget didn’t predict that a single one of the 10 stocks had the potential to go up in the next 3-6 months.

Conclusions

From this analysis of the performance of 10 of the 30 Dow Jones stocks over the past 3 months to the price movements predicted by the Chaikin Stock Rating Widget, we saw that the widget did not accurately predict the performance of any of the 10 stocks, and seemingly could not predict the movement of the overall market either since none of the predictions were directionally correct.


While I realize that a study of 10 Dow Jones stocks is by no means exhaustive (the widget may work better for other stocks in certain sectors, etc), because of these results obtained over 3 months, I would still not be comfortable making buying and selling decisions solely based on the results from the Chaikin Stock Rating Widget. Additionally, the low % of accurately predicted price movements gives me cause for concern. 


To me, these results also reinforce why I avoid individual stock selection for the bulk of my retirement assets, using a passive investing strategy of index mutual funds instead. If a model based on 20 factors developed by an expert that has spent years in the industry cannot accurately predict price movements of individual stocks, what would make me think that I could have more success?


Lastly, since the Chaikin Stock Rating is “proven successful at identifying a stock’s potential over the next 3-6 months,” I have placed a reminder on my calendar to check the performance again 3 months down the line. It is possible that the results will be a different story then!


How about you all? Have you ever used the Chaikin Stock Rating widget or any other similar tool for analyzing stocks? If so, which ones? How well have you found that they work? 


Share your experiences by commenting below!

***Photo courtesy of http://farm4.static.flickr.com/3487/3897338431_579b5556e6.jpg

Cavalcade of Risk # 147 – Riskiest Start-up Businesses Edition – December 28th, 2011

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $74.52 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is December 31st, 2011, just a few days from now!


Welcome everyone to the December 28th, 2011 edition of the Cavalcade of Risk. The Cavalcade of Risk (or Cav of Risk for short), as is implicated by the name, is a bi-weekly blog carnival that features the top articles regarding risk management. Several of the realms of risk management covered relate to finances, insurance, and health.

My Personal Finance Journey is honored to be hosting the last Cav of 2011 this week. We’ve hosted the Cav two times thus far in 2011. On March 23rd of this year, we featured a bunch of very interesting articles and centered the Carnival around the theme of the riskiest jobs in the United States. What we saw was that fishing and logging-related jobs weighed in as the riskiest occupations, with MANY more deaths per 100,000 workers than the other top-ranking riskiest jobs. Next, on July 27th, we centered the theme of the carnival around the riskiest sports in the world. From this, we discovered that cave-diving, cheer leading, and horeracing all have inherent risks involved with taking on the hobby.

Continuing on with this theme of exploring high risk activities/jobs, the theme of this week’s carnival is the top 3 riskiest business start-up ideas in the market today. But, without further ado, let’s get on with the Carnival.

Listed below are this week’s Top 3 Editor’s Picks! Enjoy!

1. Nelson presents Not Everyone Needs Life Insurance posted at Canadian Finance Blog. Not everyone needs life insurance. This includes single people with no dependents to provide for and underage children not yet earning a meaningful income.


2. Emily Holbrook presents Extreme Risks of Reality TV Shows — Are They Insurable? posted at Risk Management Monitor. Fear Factor, Wipe Out, Survivor and even The Biggest Loser are all shows that put contestants at risk. And, in order to gain viewers’ attention (and ratings to keep advertisers happy), reality shows are constantly trying to one-up each other while in turn increasing their risk. So, how do these shows get away with it? Who would insure such insane acts? How do producers make sure they’re covered in case of an injury or death?


3. Ken Faulkenberry presents The Art of Position Sizing to Manage Money and Risk posted at AAAMP Blog. Learn how to use position size, scaling in, and scaling out to manage risk within your asset allocation.

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Risky Business Start-up Idea # 1 – Carpentry Contracting
This business idea made it on the risky business idea list because it is tied to the success/health of the housing industry. And, since that hasn’t been doing well the past 3 years or so, carpentry contracting has been in a permanent decline. 


In my personal opinion, I think that carpentry contracting isn’t as risky of a business idea as some of the others on the list. Sure, if the housing market continues as it has been since 2008, carpentry might be in trouble. However, I believe that eventually, the housing market will rebound, and this will fall off of the list.
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And, listed below are the best of the rest!

Louise from the Colorado Health Insider posted about Colorado HealthInsurance Website Receives Praise From HHS, saying, “Between the national recognition garnered by Rocky Mountain Health Plans 30-year partnership with Grand Junction physicians, the fact that Colorado has been so proactive already in terms of establishing the framework for a health benefits exchange, and the praise from HHS for the new health insurance transparency website, it would appear that Colorado stands out as a leader in health care reform..”


Jaan Sidorov MD presents HHS Blinks On The Affordable Care Act’s Essential Health Benefit posted at The Disease Management Care Blog. In this post, Dr. Sidorov looks at how Washington proposes to settle the controversy over the Affordable Care Act’s ‘essential health benefit.’ While the threat was that HHS would require an out sized benefit package, Dr. Sidorov says common sense prevailed.

Phil presents Backing Up Civilization posted at Transparency Revolution and discusses risk mitigation.

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Risky Business Startup Idea # 2 – DVD, Video, and Game Rental Stores
This business idea, in my opinion, is not only a risky business, but it is one that simply should be avoided. Period. Netflix and Blockbuster online/mail order rental services have completely taken over this market. 


Take a second and ask yourself one question – “how long has it been since you set foot in a physical video rental store?” For me, it has probably been about 4 years now. This business start-up idea is simply one that should be avoided. 
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Paul Vachon presents How to Save Money on Home Insurance posted at The Frugal Toad. Home insurance is one of the most important forms of insurance you can purchase and in most cases, is required by your lender. Not all homeowners insurance policies offer the same coverage so it is important to shop for a home insurance quote.

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Risky Business Start-up Idea # 3 – Coin Laundry and Dry Cleaning Businesses
In the source article listing these business ideas (see link below), it mentions that coin laundry businesses are risky because there are 1) many established players in the market already and 2) very high capital start up costs (just think about buying 30 washers! haha). In addition, there are low profit margins, and the franchise fees are very high. All of these factors make for a risky venture. 


However, setting the risk factor aside, I do believe that there will continue to be a market for these services/locations. People will always need to wash/dry their clothes, and especially in tough economic times, it’s unrealistic to think that EVERYONE will be able to afford a washer and dryer in their own home. So, all in all, I think that this business has risk, but since there is a demand, the risk can be managed. 
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FMF presents Ten Insurance Policies You Need To Own posted at Free Money Finance. There are an incredible number and array of different types of insurance policies that you can purchase and quite a few that you should own. You may look at the number ten and think that is just way too many, but when you get right down to it, they might be just right to keep you and your family protected.

Philip Taylor presents Fix Your Finances and Quit Your Day Job posted at PT Money Personal Finance. Discusses the risks involved in quitting your day job and how to get your finances in order if you are looking to quit.

Well – that concludes this edition. Thanks for tuning in!

You can submit your blog article to the next edition of Cavalcade of Risk (scheduled for the middle of January and hosted by Political Calculations) using the handy carnival submission form.

Also, if you are interested in hosting the Cavalcade of Risk in the future, just send Henry (the organizer) an email by clicking here.

***Photo courtesy of http://s0.geograph.org.uk/geophotos/01/53/75/1537512_ff3abfea.jpg
***Riskiest and safest business startup ideas ranking source – http://www.allbusiness.com/startups-risky-business-ideas/15561619-11.html

The Effects of TV Shows on Reality

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $74.52 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is December 31st, 2011.


The following is a guest post written by Jason, the Frugal Dad. Check out FrugalDad.com for more personal finance advice and retailer coupons and deals.

How about you all? Do you watch a lot of reality TV? If so, what do you find draws you to watch the shows? If not, why do you avoid it?


What are the positive and negative effects of reality TV on today’s society in your opinion? 


Share your experiences by commenting below!


Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• @ The world’s obsession with reality TV –
• Personally, I probably am not the best person to ask/comment about reality TV since the only reality TV shows I’ve really ever watched were Survivor and some of the series on the Discovery Channel, such as Dirty Jobs, Mythbusters, and Deadliest Catch. And, as far as I know, these shows aren’t the “stereotypical” reality TV shows that people most often think about.
• However, I do agree with the findings of the research study mentioned in the article above that mentions that many people choose to watch dramatic reality TV in order to feel better about one aspect of their lives or another.
• It could be argued that even with “light” drama reality TV shows such as Deadliest Catch and Dirty Jobs, people could watch these in order to feel more empowered/better about their own occupations. 
• Do I think this is why I watch these shows? I didn’t until I read this post, but now, it has made me stop and think….It could be that on a sub-conscious level, I like to watch Dirty Jobs to feel glad that I don’t have to deal with that sort of stuff in my day-to-day routine. 
• However, the conscious side of me says that I really like to watch the show just for the sake of it being interesting to find out what other jobs entail. 
• After all, I have started a business that involved scooping up dog droppings from other people’s yards, so I definitely don’t feel like I am “above” jobs that involve getting your hands dirty.
• However, it’s definitely an interesting idea to ponder, since it’s not often that you think about what’s going on at a subconscious level.
• But, one thing that is for certain is that reality TV is wildly popular in today’s society! I once heard that more people voted for the winner of American Idol than for the President of the USA. Crazy!
• @ How reality TV affects today’s society – 
• Another intriguing question is, how does reality TV affect the world’s population?
• First, I do feel that reality TV does shape our perceptions about what is considered “cool,” “attractive,” “socially acceptable,” as is touched upon by the article above.  
• However, another potentially harmful effect that could be experienced with a large portion of the world’s population being glued to the TV set for many hours each week is a decrease in productivity.
• For example, instead of watching reality TV (or any TV for that matter) 4 hours per week, could that time be used to start a side business to help secure your family’s financial future?
• Instead of watching TV, could you be studying more? learning new skills? doing your homework? The list continues….
• It’d be interesting to do a future post to investigate any linkage between hours of TV watched per week and wealth/financial success! It’d be cool to see what trends could be observed!

***Photo courtesy of http://farm4.static.flickr.com/3267/2873334814_c45bcd0527.jpg

Who Manages Money Better – You or Your Government?

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Often times, when I talk to individuals about the personal debt they carry (especially in the form of consumer debt), I get the feeling that they feel alone and/or isolated because of the money they owe. Because of this, they feel very unwilling to share the details of their debt or reach out to others to help them.

However, the truth of the matter is that there is no reason to feel isolated or alone because you carry debt. In fact, many individual people AS WELL AS entire governments of countries are facing problems with debt in today’s society. In this way, debt has truly become a problem/issue on the global scale.


The purpose of this post will be to take a look at the current levels of debt that individuals are currently carrying and then compare this level to the amount of debt that governments hold in an effort to see who in today’s society is doing a better job managing their finances – people or the government.

Current State of Individual Debt

Thanks to Creditcards.com and independent.co.uk, I was able to dig up the following statistics about personal debt in the world today:

United States

• The average college graduate in the US has approximately $20,000 in debt.
• The average credit card debt per household with credit card debt = $15,799. The overall average unpaid balance (includes people that pay off their entire balance each month) is $3,389.
• Personally, my takeaway from this pair of statistics is that once people decide to go down the path of having credit card debt, the magnitude of the debt becomes very serious/huge!
• The average household total debt – including credit cards, mortgage, home equity, student loans, etc – for all U.S. households is $54,000.

• The average household total consumer debt (excludes mortgages) in Europe is $2,068 USD. The average for the UK is about twice this value.
• I had trouble finding reliable statistics about the average total debt in Europe. However, there was one report from TheDailyBeast.com that mentioned that the average household debt in the UK was 183% of the average annual disposable income, and that this figure was very high for a European country. 
• According to BBC News, the average disposable income in 2008 in the UK was about $23,000 USD. 
• So, a rough estimate of the total household debt in the UK would be 1.83 x $23,000 USD =  $42,090.
• We’ll consider this a high figure for Europe. And, as a conservative estimate for the average European household debt, we’ll use half the UK value, equaling $21,045 USD.

Current State of Government Debt

So, above, we obtained an approximate picture of the current state of personal debts both in the US and Europe. Now, let’s take a look at how the money owed by the governments of these nations stacks up against the personal figures to see who is actually doing a better job managing their finances – people or governments.

According to a recent report, the following statistics give an overview of the current levels of debt carried by the governments of Europe and the US:

• By the end of 2011, the US government is projected to be carrying a per-capita debt of $32,000 USD. 
• In the year 2000, the per-capita debt carried by the US government was almost 3X lower at $12,000 USD. Wild stuff! It’s been a costly 11 years!
• By the end of 2011, the European governments, on average, are projected to be carrying a per-capita debt of $29,000 USD.
• In the year 2000, this average per-capita debt carried by European governments was almost 2X lower at $17,500 USD. 

Conclusions – Do You or Your Government Manage Money Better?

While I admit that there are many facets to analyze in determine the quality of “managing money,” examining the statistics listed above can give us a good indication of whether governments or individuals are performing better at staying out of (or at least minimizing) debt.

In the US, the average personal debt is almost 68% higher than the per-capita debt carried by the government. This data indicates that the US government, for all of the mistakes that it most likely has made, is doing a better job than its citizens at reducing debt.

In Europe, the opposite seems to be true in that the government seems to be worse-off at getting in to debt than the individual citizens. Using our rough average obtained for personal debt throughout all of Europe of $21,045 USD, we ascertain that this is almost 33% less than the per-capita debt carried by the government.

Thinking about these conclusions, they tend to make a lot of sense (at least to me personally).

First, I know for a fact that obtaining credit is MUCH easier in the US compared to pretty much anywhere in the world. For example, one of my Peruvian blogging friends was telling me that it is a HUGE process simply to get a small balance on a credit card in his country. I’ve heard similar stories from my Chinese graduate school friends, and I have experienced this tight-credit phenomena when I was living in Spain. Because of this, it makes sense that relative personal debt levels would be higher in the US than other locations.

Additionally, I know that the governments in Europe are “bigger” than in the US in that they offer more public programs. A good example of this is public health care. Thus, it at least partially makes sense that the government debt figures are relatively higher than personal debt in order to keep these government programs going.

An Outstanding Set of Questions To Ponder….

As is generally the case with global economic issues such as this, an investigation often generates an entirely new set of questions. Thus, an interesting set of outstanding questions to all of this is the following…..

It’s no doubt that individuals in the US are in large amounts of debt.

• However, are individuals in the US actually worse about getting in to debt and not paying it off because of a lifestyle/culture issue? 
• Or, do people in the US simply have greater access to credit and therefore, are more likely to get in to trouble with debt than people in other countries? 
• If people in other countries had the same access as Americans did, would they fall in to the same problems?
• And, if the amount of debt people are in boils down to an credit access issue, how do governments know if or where to draw the line between a good amount of credit for a healthy economy vs. extending too much debt? Or, should this be something that is set by free market forces?

Clearly, I don’t have the answer to all of this, but it’s something interesting to think about!

How about you all? What’s your take on the questions posed above? 


Share your experiences by commenting below!

***Photo courtesy of http://farm1.static.flickr.com/44/142421323_28d03a8c5a.jpg