What’s Missing From This Formula?

Quiz time.

Last week while on vacation, I read Brian Tracy’s Flight Plan*, a short little book about success. On page 14 of the book, Brian has this to say about financial independence:

Here’s a simple exercise: Determine how much it would cost you per month to live comfortably even if you had no income at all. Include all your costs of housing, food, travel, medical expenses, vacations, and entertainment. Mulitply that number by 12 (the number of months in a year), and then mulitply that result by 20 (the number of years you will probably live after you retire). The total represents your retirement goal. This is how much you will have to accumulate to be financially independent.

He left out two very important details in his exercise. Do you know what they are?

I know what it is but I can’t say it here because it would defeat the purpose of the quiz. The first person to answer the question correctly (I’m the judge of what is or is not the correct answer) will win a copy of Flight Plan*. Just remember this little contest is only open to U.S. residents.

Good luck.

[Now begin playing “Zeopardy” music…]

*Affiliate Link

We’re ALL Self-Employed!

Have you ever wondered why good customer service is hard to find? I have! Everytime I go into a store, the first thing I notice is how crappy customer service has become. I would say that nine times out of ten, my customer service experience is subpar.

Why? Why are so many employees just showing up to put in their hours so that they can collect their checks? Why aren’t more employees excited about their jobs? I can’t figure it out. Is it a symptom of our society or is it something else?

The other day my kids and I visited our local Dillard’s so that I could pick up some shirts for our trip. While walking around in the store, I noticed two Dillard’s employees standing in the main aisle talking. We walked by and neither of the women greeted us or even smiled at us. The only communication we had with the women was when one of them told my son to get his foot off a rolling cart. True, my son had no business putting his foot on the cart and had I noticed, I would have told him so. But, that’s not the point. The point was that neither of these employees bothered to say hello to the person who’s partly responsible for their income!

It would be one thing if this were an isolated incident but, it’s not. EVERYWHERE I go, employees act like they hate their jobs as evidenced by:

1. how slowly they walk around (of course some of them probably can’t walk faster due their incredibly baggy pants!)

2. how little they talk to customers or even look them in the eye

3. how MUCH they talk to their fellow employees while ignoring the customer

4. how little they smile

I think this is all due to the fact that so many people have so little self-esteem. They don’t value themselves and their potential so they think they are stuck in the rut of minimum wage retail forever.

I think an attitude adjustment is in order.

In his awesome book, Change Your Thinking Change Your Life*, Brian Tracy makes the statement that we should all consider ourselves the president of our own personal services corporation. I think this is an awesome idea! Why? Because it means taking ownership in our jobs. Employees who consider themselves owners are going to act differently than employees who simply consider themselves helpless employees.

Whether they want to believe it or not, an employee’s fate lies in their own hands. It’s true! Once they figure this out, they should feel liberated! Why? Because they can begin to take the necessary steps to improve themselves. They can begin to set goals and plan for the future. They can read books on motivation, success, and anything else they want to learn about. Then, they can choose to either work their way up the ladder with their current employer or make the decision to go elsewhere.

It’s been a long time since I was employed in the retail environment but I would think that if I were a manager in a retail store, I would do all I could to help my employees get ahead. I would have training session after training session on customer service and decision-making. I would make them read lots of books like Think & Grow Rich*, Goals!*, Flight Plan*, and Dig Your Well Before You’re Thirsty*. I would make sure that my employees knew that they were all presidents of their very own corporations.

Heck, maybe I should go back into retail!

*Affiliate Link

IMPORTANT NOTE: Don’t forget to subscribe to AllFinancialMatters (if you’re not already a subscriber). It’s free and will keep you up-to-date with everything AFM!

Balancing Frugality and Camaraderie – What’s Your Advice?

I received the following email last week:

I was hoping you could throw this one out to the group of readers:

I’m a relatively frugal recent college grad, working hard to save as much as I can. I left my job at Bear Stearns in April and started a new position at a small but stable financial services firm last Wednesday. The analysts on my team frequently go out to lunch, and have been inviting me each time. I went with the group on my first day, and we all paid for our own meals. I viewed that expense as part of team building rather than as the cost of a meal which I would have otherwise brown-bagged, but I am not interested in spending money on lunch more than once a week or so, and when I do spend that money I’m not terribly interested in eating with work colleagues (my wife works nearby and when she’s not around I enjoy relaxing alone with a book and my food). What to do?

Thank you!


My opinion:

I think you have to ask yourself what you have to gain by eating with your colleagues. If you’re the new kid on the block, it may be a good idea to forge some relationships with your new colleagues. If the only way to do that is by eating lunch with them, then perhaps you should consider doing so once or twice a week. I definitely don’t think it is necessary to eat out with them every day.

Another way to build friendship with colleagues would be to go out to lunch with one or two of them at a time. People are more likely to talk if they’re not in a large group.

The main thing is to be careful that you don’t become the office loner.

Now it’s time for AFM readers to weigh in. What’s your advice for Jay? How do you balance frugality with camaraderie?

Over 2,000 AFM Subscribers Have Vanished!

For some reason my Feedburner Subscriber stats are WAY OFF! I should have somewhere around 4,700 subscribers but Feedburner is only showing 2,500. I have no idea what’s up with that. I did upgrade my blog software and I’m pretty sure the dropoff has something to do with that. I’ve got a guy working on it but so far we haven’t got it figured out yet.

In the meantime, you can still subscribe to AllFinancialMatters by either clicking on the Feedburner box located in the upper right hand side of the page or by going to:


I’m Back (sorta)

My wife, daughter, and I made it home yesterday morning. Our boys stayed behind to spend more time with their cousins.

Overall it was a really nice trip. We dropped the boys off at Bill Self’s KU Basketball Camp and then headed to my hometown to stay with my brother and his family. It rained a couple of days, which left us sitting around the house talking, reading, and napping. It turned out to be a lazy vacation.

I want to thank Cathy and Meg for filling in for me while I was out. They both did a great job!

Although I didn’t blog during my vacation, I did spend a lot of time thinking about ways to improve this site. I’m NEVER satisfied with my blogging results and am always contemplating ways to make this blog better. I’ll be working to implement some of my ideas in the near future. If you have any suggestions, please let me know. I’m always open to constructive discussion.

I’ll be working my way back into things this week. I have a lot of catching up to do and will be out later this week so don’t expect a lot of updates until next week. I have a ton of stuff to write about and hope to get to it all ASAP.

Stay tuned…

“How Much Do You Need For Retirement?” – Dumb question?

The internet, magazines, and books on personal finance are chock full of calculators and projections to help you figure out “your number” – the usually astronomical sum of money that it is allegedly going to take for you to live off your portfolio of securities, not work, and still maintain some semblance of the same lifestyle you had while you were working.

The exercise seems reasonable – necessary even – but the problem is that the results are almost entirely arbitrary, especially if you are more than 10 years away from retirement.

There are just too many variables:

  • The rate of inflation
  • The age you’ll retire
  • The age you’ll die
  • The rate of return of your assets (and at which point along the your personal time horizon the booms and busts occur)
  • Your asset allocation
  • How much social security you’ll get – and how/if/when the system will be restructured
  • What healthcare will cost – and how/if/when the system will be restructured
  • What your taxes will be – and how/if/when the system will be restructured
  • Etc

Any shift in any one of these variables can drastically alter the final figure that pops up, telling you how much you need to have saved in order to retire at X age or how much each year you need to be putting away.

That doesn’t mean you shouldn’t strive to save as much as you can. After all, I’ve never heard anybody complain about having too much saved for retirement.

Still, it may mean that there’s no reason to be having panic attacks over the fact that some calculator says you need $3.5M in the bank before you can retire comfortably. You might be able to get by just fine on much less than that – or hey, you might even die before that “age 99” you plugged in.

More from Meg at The World of Wealth

A few of my favorite blogs

Thanks so much to JLP for asking me to fill in for him, and to all of you for being so fun to write for. You’re smart, knowledgeable, and nice, so it was a true pleasure. I hope you’ll stop by Chief Family Officer to say hi!

I’d like to leave you with some of my favorite blogs. They’re not necessarily personal finance blogs, just sites I think you’ll enjoy.

  • Baby Cheapskate – Angie lists the best baby-related deals, and recently came out with a very handy list of the number of diapers in each name brand package to make it easier to figure out if a sale really is a great deal. If you have kids in diapers, you should definitely download the list.
  • Like Merchant Ships – I really admire Meredith’s philosophy of “cheerful frugality” and enjoy her tips on hospitality and cooking without spending much money. A few months ago, she fed her family from a 1950’s budget menu based on an old book she found.
  • Lunch in a Box – A couple of months ago, my three-year-old asked me if he could stop having school lunches and bring lunch from home instead. I had actually been wanting to stop buying school lunch myself, but was afraid that he might object since most of the kids do eat the school lunch. It’s important to me to pack him a healthy, attractive, and delicious lunch every day, and Lunch in a Box has really inspired me. It helps that Biggie mainly dissects her own preschooler’s lunches, but the ideas she shares would work for anyone who wants to liven up their portable lunches. If you’re sick of bringing sandwiches from home, definitely check this site out.
  • PRIZEY – This blog pretty much just lists giveaway after giveaway, so if you like entering contests, this blog is for you. Just be aware that there is an emphasis on parenting and child related giveaways.
  • Gov Gab – This is actually the official U.S. Government blog. It seems to be written by some fairly young, down to earth government employees who like to share usefulinformation. I particularly like that they often link to government resources I didn’t know about.