On Growth Track

Believe it or not, high IQ does not translate into a lot of wealth. This is a finding from research at Ohio State University. Each additional point in IQ means $200.00 more income every year, on an average.

So why does high IQ not mean higher wealth?

Its all about habit of saving and not about income. And the good news is any one can save by using simple rules and doing so regularly. Buying what’s appropriate, living in ones means are the basic. IRA, Roth IRA, 401K, must be a part of every one’s saving scheme, if applicable. High yield bank saving accounts, low expense index mutual funds and low cost index ETF’s do not require a lot of research and are good vehicles to start ones personal research for investment.

Consistency is more important in the long run and not the brilliance of moment. Overconfidence and arrogance associated with IQ can lead one to make mistakes while being humble and learning from mistakes of ones and others and following simple rules consistently can lead to growth of investment.  Growth habits keeps one ongrothtrack.

PN

please follow these kinks for the more information on this interesting research

http://researchnews.osu.edu/archive/divwlth.htm

http://biz.yahoo.com/fool/070518/117949647104.html?.v=1

ETF’s Have recently gathered a lot of interest and attention all over the financial world. But what does it mean for the individual investor?

For an individual investor, the most important thing is to preserve capital and reduce cost and tax implications while making regular investment. Overly aggressive investing require lot of time and resources and cost more in trading and taxes.

The basic old school of ETF’s remains attractive because of the following reasons.

• It offers the benefit of indexing at low cost. This can compare with index mutual funds also. The low cost structure comes from the fact that there is no need to keep paying fund mangers to actively allocate stocks. The ETF SPDRs (SPY), which tracks the S&P 500, charges investors 0.09% and the similar index fund Fidelity Spartan 500 Index Fund (FSMKX), charges investors just 0.1% annually.
• Tax structure benefit for ETF’s is because they don’t sell the underlying stocks when investors depart, wile the Mutual Funds sell the stocks to pay the investors and that means a capital gains tax hit for remaining investors.
• Instant pricing offered by ETF’s is desirable over pricing at timing of market closing which is typical of Mutual Funds as one can take real time action instead of waiting for the day to end. HoweverETF prices have Ask-Bid spread (nice analysis @mymoneyblog) at any time and are not traded at NAV as the mutual funds. High ask and bid price difference can mean accumulating trading loss for active traders but even buy and hold investors should be watchful of spread and track the patterns in historic data.
• ETF’s have no restrictions on amount to invest, number of times it can be traded, exit cost and financial penalties as associated with Mutual Funds which ask for minumum investment, front load, back load or early redemption fees.
• ETF’s offer a way for diversification in foreign markets, and commodities. This when linked to an established index is transparent enough and still offers the benefit of low cost.

There has been a proliferation of ETF’s recently, its best for individual investors to stick to established indexes and ETF’s in which the cost is low. A low cost ETF usually means a large investor base so that they can over the expenses of running the ETF easily. This has been a problem for some ETF’s and they had to close down while their long therm investors had to take unexpected tax hit. Also individual investor can look up at the historical data for a longer time for a well established ETF in terms of Ask-Bid Price.

With the brokerage costs coming down the old school ETF’s can be attractive for individual investors. Do your research and let ETF’s or low cost index mutual funds out you ongrowthtrack.

PN

Time and money are the most valuable resources one can have. There will be a series of articles as I get more clarity on these to manage these things better.

The key to best utilization of time and money is being effective. Effective to get the things done in the right way with the minimum of resources.

What does it take to be effective?

We will come to the answer if we understand that all things are created at-least twice. This is really a powerful idea.

First they are created in the playground or the sketchpad of mind, they undergo easy modifications as we muse on. Then takes place the action to actually create it. This is similar to how some advertisements work on us, so there is no doubt its effective.

The good news is that it works, so we can use it effectively for us. This is how we can do it. When we are musing about something desirable we step back a little in time in our mind to trace how we are making it happen. In other words we are going through the stages to make it happen. A lot of stages may not be clear at this time. This unclarity, confusion is a blessing in disguise (more below).

As we go through the steps more to see the details we understand the following:

• What are the steps, what are the different possible correct order of events
• what is absolutely essential, regulations
• what will take the most resources, time / money, getting an estimate if them
• what will take special ability, where we will need help.

But, such helpful thoughts can happen if we allow them to happen, some things are helpful in this regard.

• We have to allow ourselves to be in solitude and not be busy all the time.
• Record our thoughts, this is similar to saving money. We need to benefit from all the good thoughts that come to us at some point later.
• Be comfortable with uncertainty and deal with it. Uncertainty can be uncomfortable, but that does not mean we should avoid it. We must first admit the uncertainty, try to think in different directions, or get inputs from other sources to deal with it better.
• Observing without a reason. If we do everything with a reason, we miss ideas that are not aligned with out reason. To clear out mind, remain nimble and thoughtful we need to look/listen/feel different things without any overbearing thought at leisure and enjoy the experience.

When we have helpful thoughts, we are able to deal with uncertainty. We become more understanding and become more honest with us to make better choices. Making thoughtful choices keeps us ongrowthtrack.

-PN

We all like functional and inexpensivefurniture, however it’s so rare.

There are a few ways to cheap furnishing …

Track the moving sale, however you won’t get it when you want it …, you wont get every thing you need to all the time. If you are moving into a new place and need to get jump-started on low budget …

I recommend IKEA, and going there with a U-Haul. I have seen people travel across a state to shop there. If you need to get a lot of things, midweek is the best time. weekends are good for a casual visit, as it is over-crowded at that time, get their early if you can to get a good parking spot.

IKEA ’assemble it yourself’ furniture are simple and good offer functionality, I have assembled a bed, bookshelf, bar-stools in my house, I love it every day. 

But before you visit IKEA which can be overwhelming experience, I recommend doing the homewok.

Study the catalogue, note the 9 digit item number, its the most important, else you will spend all your time dealing with the information overload in the store.

Enter through the ‘as is’ section for bargains,  (no warranty, no returns). This is usually located near the returns. Do not let them trick you into visiting the whole store before you reach the bargain section. Some people exclusively shop at the ‘as-is’ and the items there change often durign the day. The IKEA folks in ‘as-is’ are helpful if you need to decide on some item, they will also give you tips on minor touch up’s and how to take things apart etc.

As soon as you are done with shoping in ‘as-is’ proceed to locate all other things with the 9 digit code, ask an IKEA person for help in locating, you will save a lot of time.

If you dont have a tool box make sure you buy it there, its inexpensive, like $6 or so.  

I do not recommend their assembly service if you have very basic familiarity with woodworking. If you already have your truck or U-Haul, you are all set and dont need the delivery except very large peices like a odd shaped sofa.

Most of the work begins after you reach home, be patient in assembly. For bed frames don’t forget to buy the mid beam and slats. Make sure you buy every thing you have decided in your homework. Else whole trip will be a waste and you will have no alternative but to visit again. They don’t offer internet shopping for most of the products.

You also may want to get other household stuff there, the prices are better than sams-club on many items. 

Meals are inexpensive but there are no veg options, you can get hungry and thirsty, I recommend carryign some snackbar and water at-least.

I have some friends who don’t like the IKEA minimalistic look, but I love it for its functionality and affordability. In any case you are better informed with reaearching their catalogue and planning for a visit. In case you get an IKEA coupon, Please make shure its valid in the store where you plan to visit.

 In case you are using zipcar, you have good parking spots reserved in Stoughton, MA. Zipcars are cool, however, I would use U-Haul and combile the trip with some one else for our furniture shopping.

One planned visit to IKEA and with in a week you will be back ongrowthtrack with no lack of functional furniture holding you back.

PN

This week the Business Week magazine has posted an interesting cover story which can be summed up as Being Poor is Costly, Frugality and Discipline paves the way out.

It has a lot of examples of how poor people continue to remain poor. One can blame the industry, but still a real person is making choices (uninformed in most cases).
Why does it cost so much to be poor, its more complicated than we think.

• Lack of access to affordable financial products and services. Any time there is a credit check, either financial service is denied to poor people or comes at very high price. This is true for getting any loan, mortgage, insurance and credit cards.
• Feel rich quick marketing. This really gets people into trouble as the initial cost for financing the so desired stuff seems less but the total cost of ownership is can be as much as twice when compared with someone who has good credit.
• Another aspect of feel rich quick marketing is that it pushes a lot of stuff to people which is something they never need. It takes a discipline, thinking through and accepting frugality as a virtue to say no to stuff one does not need.
• Not Shopping around enough. Shopping the right thing takes effort as well as discipline, its also requires doing homework collecting information and analysing ahead of purchasing. The more one does such kind of homework the better one gets at it. But before one can undertake such a homework people need to know this is indeed possible to do than just relying on the first offer they see jump in excitement.

What is the way out? Its simple but takes time, patience and discipline to follow.
Embracing frugality and appropriateness, discipline of doing the homework and analyzing the details can help one stay out of financial trouble. But these virtues are equally applicable in other aspects of personal growth, may be in slightly different ways. As one gets on the growth track with patience and discipline, moving ahead on the track becomes easier, one finds more opportunities to continue on the growth track and it becomes self sustaining and nurturing as out self-discipline and habits improve.

When we make the correct choice, we move on the growth track.

PN

BusinessWeek

Purchasing grocery at Stop n Shop is really simple if one keeps in mind the following rules.

1. Get the weekly circular, you can get it on-line also on their site. This comes on Thursday every week and is valid for a week. Do the homework, go with a list.
2. Look for the things that are on sale, things that are on “everyday low price” are not the lowest.
3. Look for sore brands when shopping and buy in multiples of two.
4. Coupon insert from Sunday newspapers are helpful, use coupon for the smallest size item. Coupon clippers are helpful if you need somethign in particular or somethings in large quantities.
5. Pay attention to 10 for $10, kind of deals, you need not get all 10, getting even one gives you the 10 for $10 price.
6. Monitor price for all the items that you purchase / interested, use a spreadsheet if necessary, you will be able to spot the lowest price.
7. Items on sale change every week. Stockpile when you see something.
8. Always check the receipt for errors after you have checked out, errors do happen, Promptly visit the customer service in that case and get it resolved.
9. Ask for rain checks if item on sale is unavailable.

Smile, watch your savings grow by smart shopping at shop and stop. I guess most of this will be applicable at other stores also.

-PN

Consider the following for what’s worth your dollar and more:

Do you buy Premium or regular?

Do you buy spring clothes in late winter?

Did you buy the best prosumer camera / cellphone / laptop/ gadget in the market?

Do you upgrade to business class / first class by paying wile travelling?

you deserve the best

Chances are, this message is a seed for an answer of yes to any on the above questions.

While we enjoy the feeling of what feels best and what money can buy we loose sight of whats appropriate and how appropriate is the best.

By Appropriate, I mean what gets the job done with the minimum extras, just like most of us would choose regular fuel if premium is not strictly recommended.

However things may get complicated when we perceive a deal as in the airline upgrade, and there is a bit of us that deserves the best to complicate it. How does one deal with such a situation? There is no easy way out, but personal experience or information from other’s experience. When we are ready to do a even headed comparison of value and cost regardless of MSRP and our feel good feelings, we are making a good choice.

To start with

Prepearation ahead of time.

Shopping around and having the data recorded.

documented experiences from other sources (good blogs are great) are your best guide.

Next

when we have the data and armed with knowledge we will know what are the key questions to ask and what are the considerations for getting what’s appropriate. This will certainly help you deal with the most pushing sales person face to face or on the phone.

Don’t give me more, don’t give me less, don’t give me the best, let me get what’s appropriate for me after I have done my homework.

PN

Get your travel coffee mug.

• discount for every refill any where, even at Starbucks, just ask
• no spills, so no restriction in libraries etc, makes so much sense for students
• coffee remains hot for much longer time, more creativity, thanks to better insulation
• save paper cup and plastic lid, less trash, go green.
• you can even get your own mug personalized and make a great statement making it a greener world.

Coffee Mugs Personalized - Coffee mugs & Coffee Cups personalized or custom designed. Print your cups, travel mugs, water bottles, and glassware at a discount price.
Don’t underestimate the future value of the daily present discretionary spending, you may be surprised if you calculate the numbers. You are also eliminating any need to use paper for you.

PN

economist

The experience of personal growth is cherished by all of us and adds meaning to our lives.

This is a log of thoughts and happenings related to personal growth so as to get involved a bit more with it.

May growth be for us.

PN