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Archive for December, 2010

Tips for Saving Money During a Long Trip

December 13th, 2010 at 07:42 pm

In a few days my dh and I will be taking a trip that will take us away from home for six weeks. In preparation for being gone for an extended period, I have put the following services on "vacation hold:"

~ Trash
~ Sewer
~ Newspaper
~ Netflix
~ House cleaning

I calculated we will save at least $255 by placing these services on hold. In addition, I placed our mail on vacation hold, although it can only be done for 30 days at a time.

Before leaving, we will turn off the pilot on the gas fireplace, shut off the water valves to the washer, and turn the water heater to the low setting. The forced air heater will be set to a lower temperature (60) but not so low the pipes will freeze, and the ice maker will be shut off. This will save on the gas bill and protect the house from water line mishaps. (Years ago, after a two-week trip, we came home to a flooded house due to the washer hose breaking).

We will call our credit card companies to alert them we will be traveling out of the USA and give them the names of countries where we will possibly use our cards (i.e., Devil's Island, St. Lucia, Brazil...).

While we are traveling, we will keep our cell phones on "Airplane Mode" to avoid long distance roaming fees but will keep the Wi-Fi option turned on. This will allow us to check our email whenever we are in free Wi-Fi range (e.g., many hotels, cafes, and airports). I will also contact ATT about international data plan options in case I need to use my email from my iPad when we are out of free Wi-Fi range.

Another thing I do when we travel is send family a copy of our itinerary so they know how to contact us in case of an emergency, especially if our cell phones are turned off. I will also email myself an encrypted spreadsheet with our credit card numbers and phone numbers in case we lose the cards, and I will email myself an encrypted pdf of my scanned passport for the same reason.

And lastly, I carry my medical records on a flash drive that was given to me by our HMO. My comprehensive health records are on an encrypted pdf that requires a password to open, just like the documents I email to myself.

Our trip will take us 1,000 miles down the Amazon River to Manaus.

Lessons from Financial Fiascos

December 3rd, 2010 at 01:56 am

Most of us have made poor financial decisions at some point in our lives, and I am no exception. I was reflecting about some of my worst financial decisions over the years and thought maybe someone else can learn from my mistakes:

1975 - After the death of my mother and father within a few months of each other, my sister and I sold my parents' home in SF to a relative of our estate attorney. We were young and naive and did not know the sales price was extremely under market value. We essentially gave away a home that was worth much more, especially because of its prime location. Selling the house wasn't the issue, it was making an uninformed decision... we sold it without consulting anyone else (e.g., an appraiser) and trusting our attorney 100%. Of course, we were young, vulnerable, grieving the loss of our parents and inexperienced in real estate matters. Lesson learned: Just because you have known someone for years and they seem kind and fatherly, it doesn't mean they won't take advantage. Think twice, wait a while, talk to others.

1983 - Newly divorced, I entrusted $22,000 to a family friend, a stockbroker, who talked me into the same investments he recommended for his parents. Big mistake. Today, I have approximately $1583 to show for that investment, and a K-1 that won't go away. It was a lot of money back then (and still is!). Lesson learned: Don't let someone talk you into an investment by using an emotional or personal rationale like "I had my parents invest in this." Do your research.

But did I learn my lesson? Nooooo... keep reading and you will see why. First, some background to explain my stock market experience:

1995 I was a late bloomer getting into the stock market and started buying stocks after researching some major companies, some of which were blue chip. Since I was a beginner, I had a fellow teacher who shared copies of Value Line to help with my research. I focused on companies whose products or services I liked or used, and bought individual stocks in lots of 100-500 shares for several years. My portfolio was doing moderately well until...

1998 I broke away from my strategy and bought some technology stocks based solely on my dh's raving about how these were the "up and coming" companies, and how his stocks had quadrupled in value, blah, blah, blah. So I bought (VRSN, XICO, XLNX)... and, about two years later, all of these stocks tanked with the implosion. Why I listened to my dh who had even less knowledge than I did, I don't know.

Then, to make matters worse, I kept those duds for years, despite the fact they could not possibly recover in my lifetime. I eventually sold these dogs, despite my "buy and hold" strategy. Most of my original stocks have been a solid investment, despite taking a beating in the most recent meltdown. Thankfully, I did not take dh's advice to sell my AAPL stock! But the experience gave me cold feet for buying more stocks and I lost my interest in the market for quite a while.

Nowadays, I am ultra conservative when it comes to new investments in the stock market. When I allowed myself to be influenced by my dh's enthusiasm and confident attitude... any maybe even a little by greed, I paid the price. Since retiring, I'm reluctant to buy more stocks, but for the younger folks, there are some bargains to be had.

Stocks I'm glad I bought and held: AAPL, ABT, AMZN, MSFT, WMT, PG, GE, SBUX, HPQ. Slow and steady, my original stocks have grown by an average of ~9.5% a year, excluding APPL which has had phenomenal growth. But then there were duds like WAMU, which became worthless. Lesson learned: Do your homework and think for yourself, then you have no one else to blame for your decisions.

"Self-trust is the first secret of success."
Ralph Waldo Emerson