Have you guys traveled abroad recently? I am currently on an international business trip, visiting a place that I know very well and in which I have previously spent a great deal of time. With the Dollar depreciating against most major currencies international travel has become much more expensive - our Dollars buy a lot less abroad than they used to.
This is a consequence of the U.S. trade deficit and federal government budget deficit. It is also a consequence of expectations for increasing interest rates in the Euro zone and elsewhere, and of the booming global economy.
The fall in the dollar has been very good for investments denominated in foreign currencies and investments in companies which generate most of their income abroad. For example, Vanguard's Total International Stock Index (NASDAQ: VGTSX) has returned 19.9% in the past year.
While it may be tempting to bet against the dollar, I am sticking to my guns and am not changing my portfolio's exposure to international markets in the near term. In the longer run, I think we need to invest a slightly higher portion of our assets in international stocks, but I will make that change gradually, and without taking into account market fluctuations or my own hunches about where the markets are heading.
Sunday, April 29, 2007
Saturday, April 28, 2007
Feng Shui & Business
I recently had an interesting discussion with one of my colleagues regarding Feng Shui. She is a believer. She told me a story about a business located near Golden Gate Park in San Francisco. For years, businesses located on the spot failed one after the other, until one business owner invited a Feng Shui master to advise him. The master told the business owner that for the business to succeed, he must paint the walls of establishment a deep green. The business owner followed the advice and sure enough the business thrived in the same spot for the next 20 years.
When the owner finally retired, a new business went into the same location. The new owners repainted the walls a different color, and ever since then no business survived in that location for more than a few months. My colleague took the story as proof positive that Feng Shui works... I took the story as proof positive that people will believe anything.
It's not that I am saying that Feng Shui doesn't work, although I certainly don't believe that it does. What I am saying is that there is a serious problem with people drawing far reaching conclusions from anecdotal evidence or from urban myth and using those conclusions for making financial decisions. In this specific case the story was about Feng Shui, but it could just as easily have been about astrology, numerology or about financial tips from a semi-respectable business guru.
In addition, I have a problem in principal with people that are willing to believe that something like the color of their walls is a decisive factor in the success or failure of a business venture. After all, if all it takes to succeed in business is the right coat of paint, why work hard? Why come up with a business plan? Why hire the best employees? Why advertise or focus on customer service? All you need to do is get a brush and three gallons of paint, and voila, problem solved.
This line of thinking extends to personal finance. People invest their hard earned money based upon unproven theories, hot tips and wild speculation. Think I am wrong? Consider "technical stock analysts" - there is not a shred of scientific evidence to show that there is any real basis to this investment strategy, yet there are hoards of people that make buying and selling decisions based on it. Trusting in such fiction gives some people a sense of control in what is essentially a chaotic and unpredictable environment. Personally, I'll take those boring index funds, that have been repeatedly shown to beat a large majority of actively traded funds.
When the owner finally retired, a new business went into the same location. The new owners repainted the walls a different color, and ever since then no business survived in that location for more than a few months. My colleague took the story as proof positive that Feng Shui works... I took the story as proof positive that people will believe anything.
It's not that I am saying that Feng Shui doesn't work, although I certainly don't believe that it does. What I am saying is that there is a serious problem with people drawing far reaching conclusions from anecdotal evidence or from urban myth and using those conclusions for making financial decisions. In this specific case the story was about Feng Shui, but it could just as easily have been about astrology, numerology or about financial tips from a semi-respectable business guru.
In addition, I have a problem in principal with people that are willing to believe that something like the color of their walls is a decisive factor in the success or failure of a business venture. After all, if all it takes to succeed in business is the right coat of paint, why work hard? Why come up with a business plan? Why hire the best employees? Why advertise or focus on customer service? All you need to do is get a brush and three gallons of paint, and voila, problem solved.
This line of thinking extends to personal finance. People invest their hard earned money based upon unproven theories, hot tips and wild speculation. Think I am wrong? Consider "technical stock analysts" - there is not a shred of scientific evidence to show that there is any real basis to this investment strategy, yet there are hoards of people that make buying and selling decisions based on it. Trusting in such fiction gives some people a sense of control in what is essentially a chaotic and unpredictable environment. Personally, I'll take those boring index funds, that have been repeatedly shown to beat a large majority of actively traded funds.
Friday, April 27, 2007
Fun and Games with TSA
Ladies and gentlemen, Shadox has left the country (at least temporarily)! I am currently on an international business trip, and thought I would share some travel adventures, even though they are not directly related to personal finance:
1. Fun with the TSA - you know how you are no longer supposed to fly any liquids or gels in containers larger than 3 oz.? When I left San Francisco yesterday, I had with me a tube of toothpaste that was labeled 3.7 oz. however, the tube was almost empty (and visibly so). Not good enough. TSA confiscated this dangerous substance and tossed it.
I had one connection on my flight. On the first leg I received a soda can, which I didn't drink. I put it in my carry-on so I could quench my thirst while waiting for my connection. You know me - a cheap bastard - why should I buy $3 airport soda when I have a perfectly good can of Diet Coke that I got for free. Unfortunately, I did not realize that my continuing flight left from another terminal. I had to go through security again. Diet Coke can - confiscated.
It's a good thing that no one has tried to board an airliner with explosive underwear yet... every time the government imposes a new ridiculous rule, we just take it lying down, all in the name of fake security.
2. Luggage Adventures - my luggage didn't make it. I don't know why I thought it would. I had a 2.5 hour connection and changed airlines. All I have now are the clothes on my back and whatever was in my carry-on (which did not include any thing you can wear). I guess tomorrow is a clothes shopping day.
3. Car Rental Adventures - after a really long flight, it took me "only" 90 minutes to get my rental car. The car rental office was operated from a permanently parked van... next time, I am only renting from Hertz, and I don't care which rental company my company has a corporate rate with.
With so many little annoyances, restrictions and delays, it is a wonder business people are still willing to travel. The travel industry has been working diligently to make itself despised by those very customers from which it gets most of its income. Not a very smart business strategy, but I guess their comeuppance will have to wait for another day. Rest assured, their uppance shall come.
So, what does a frustrated and extremely jet-lagged Shadox do? Write some blog entries, of-course.
1. Fun with the TSA - you know how you are no longer supposed to fly any liquids or gels in containers larger than 3 oz.? When I left San Francisco yesterday, I had with me a tube of toothpaste that was labeled 3.7 oz. however, the tube was almost empty (and visibly so). Not good enough. TSA confiscated this dangerous substance and tossed it.
I had one connection on my flight. On the first leg I received a soda can, which I didn't drink. I put it in my carry-on so I could quench my thirst while waiting for my connection. You know me - a cheap bastard - why should I buy $3 airport soda when I have a perfectly good can of Diet Coke that I got for free. Unfortunately, I did not realize that my continuing flight left from another terminal. I had to go through security again. Diet Coke can - confiscated.
It's a good thing that no one has tried to board an airliner with explosive underwear yet... every time the government imposes a new ridiculous rule, we just take it lying down, all in the name of fake security.
2. Luggage Adventures - my luggage didn't make it. I don't know why I thought it would. I had a 2.5 hour connection and changed airlines. All I have now are the clothes on my back and whatever was in my carry-on (which did not include any thing you can wear). I guess tomorrow is a clothes shopping day.
3. Car Rental Adventures - after a really long flight, it took me "only" 90 minutes to get my rental car. The car rental office was operated from a permanently parked van... next time, I am only renting from Hertz, and I don't care which rental company my company has a corporate rate with.
With so many little annoyances, restrictions and delays, it is a wonder business people are still willing to travel. The travel industry has been working diligently to make itself despised by those very customers from which it gets most of its income. Not a very smart business strategy, but I guess their comeuppance will have to wait for another day. Rest assured, their uppance shall come.
So, what does a frustrated and extremely jet-lagged Shadox do? Write some blog entries, of-course.
Thursday, April 26, 2007
Energy Star: Save Money & Reduce Emissions
A couple of days ago I ran a post about how driving a Hybrid vehicle is not the most cost effective way to help the environment. In honor of Earth Day which was celebrated earlier this week, this is another post about the interface between personal finance and the environment.
A very effective way to help reduce carbon emissions while also saving some money, is to purchase Energy Star rated appliances. The Energy Star program is a voluntary program run by the EPA, which awards the Energy Star certification to appliances and other products that meet certain EPA criteria for energy efficiency. Here is a quote taken directly from the Energy Star website:
One more word of advice: when you do get that Energy Star rated appliance, be sure to use it at off peak hours (such as late evening). For one thing, some utility companies charge their customers variable rates for using electricity depending on the time of day when the power is used. However, if you want to help reduce carbon emissions, the real reason to use appliances at off-peak hours is that the energy you use is cleaner...
How can that be? Very simple. Newer, less polluting power sources are typically also cheaper to operate. At off-peak hours, those are typically enough to address all the demand for power. However, at peak demand those cleaner power sources are not sufficient, and more polluting and expensive power plants are brought online to supplement power production. This means that running your washing machine or air conditioner during peak demand hours causes more pollution than running them during off-peak times.
The Energy Star program gives consumers an excellent opportunity to do the right thing, while also making money. How can you go wrong?
A very effective way to help reduce carbon emissions while also saving some money, is to purchase Energy Star rated appliances. The Energy Star program is a voluntary program run by the EPA, which awards the Energy Star certification to appliances and other products that meet certain EPA criteria for energy efficiency. Here is a quote taken directly from the Energy Star website:
"Americans, with the help of ENERGY STAR, saved enough energy in 2006 alone to avoid greenhouse gas emissions equivalent to those from 25 million cars — all while saving $14 billion on their utility bills."Now that's what I call major environmental impact, with a healthy dose of "save yer money". To take advantage of this excellent program all you need to do is check the Energy Star website before you purchase your next appliance, renovate your home, or install a new traffic light... seriously, they have Energy Star certifications for those as well.
One more word of advice: when you do get that Energy Star rated appliance, be sure to use it at off peak hours (such as late evening). For one thing, some utility companies charge their customers variable rates for using electricity depending on the time of day when the power is used. However, if you want to help reduce carbon emissions, the real reason to use appliances at off-peak hours is that the energy you use is cleaner...
How can that be? Very simple. Newer, less polluting power sources are typically also cheaper to operate. At off-peak hours, those are typically enough to address all the demand for power. However, at peak demand those cleaner power sources are not sufficient, and more polluting and expensive power plants are brought online to supplement power production. This means that running your washing machine or air conditioner during peak demand hours causes more pollution than running them during off-peak times.
The Energy Star program gives consumers an excellent opportunity to do the right thing, while also making money. How can you go wrong?
Wednesday, April 25, 2007
Mini-Meme...
My good friend Frugal Zeitgeist called me out to play in this little meme game that's been going around, it's called Five Obsessions. Well, since I have been given a soap box, I might as well climb it and start preaching, right?
Here are my top five obsessions:
1. Family - family uber alles! I feel blessed and extremely lucky to have a wife I adore and three awesome boys. They are the centerpiece of my life. The rest of my family lives very far from us and not being able to share the daily lives of my parents and siblings is one of my big frustrations. My wife's family is all from the Bay Area, so if we were to move closer to my family, my wife would be away from hers. It's an unfortunate state of affairs, but such is life.
2. Personal Finance - I think this is probably a clinical obsession with me. I manage our finances on a daily basis. I intimately know the details of our investment portfolio, bank accounts, 401k plans and credit cards. I am obsessive about planning my career, but you wouldn't know it from the number of strange turns my career has taken. I make it a point to start my day by reading a few personal finance blogs, as well as some economic headlines. AND I stay up well into the night writing these articles about personal finance that I post every morning. Clearly, I have an obsessive personality at least as far as personal finance is involved.
3. Science - Science defines me. It amazes me. It dazzles me. I voraciously devour anything science related, but I especially enjoy astronomy and physics. I find it simply incredible that humankind has come so far through its scientific reasoning and sheer will-power. I also find it hard to believe that while flying in planes, watching television and eating genetically engineered crops, there are some of us that still refuse to accept the underlying truth of science. Yes, yes, I know, that's why they call it an obsession.
4. Strategy & Adventure Games - Have you ever looked at the watch and realized that it's tomorrow? Happened to me more than a few times. If I get into a good computer game (think Civilizations III) I simply cease to notice the passage of time.
5. Being Right - Everyone that knows me, knows that I am obsessive about being right. I hate being wrong, and I like to argue. A deadly combination, but in a lovable sort of way... Or... that's what I tell myself... obsessively.
Extra Credit Obsession - 42 - About a year ago, I developed a little obsession with the number 42... Wanna know why? Check this out: 42.
So, now it's time to return the meme into its natural habitat of the blogosphere. I call Not Made of Money; 1st Million; and Mapgirl, to come out and play! I hope you enjoy playing the game as much as I enjoy reading your blogs.
Here are my top five obsessions:
1. Family - family uber alles! I feel blessed and extremely lucky to have a wife I adore and three awesome boys. They are the centerpiece of my life. The rest of my family lives very far from us and not being able to share the daily lives of my parents and siblings is one of my big frustrations. My wife's family is all from the Bay Area, so if we were to move closer to my family, my wife would be away from hers. It's an unfortunate state of affairs, but such is life.
2. Personal Finance - I think this is probably a clinical obsession with me. I manage our finances on a daily basis. I intimately know the details of our investment portfolio, bank accounts, 401k plans and credit cards. I am obsessive about planning my career, but you wouldn't know it from the number of strange turns my career has taken. I make it a point to start my day by reading a few personal finance blogs, as well as some economic headlines. AND I stay up well into the night writing these articles about personal finance that I post every morning. Clearly, I have an obsessive personality at least as far as personal finance is involved.
3. Science - Science defines me. It amazes me. It dazzles me. I voraciously devour anything science related, but I especially enjoy astronomy and physics. I find it simply incredible that humankind has come so far through its scientific reasoning and sheer will-power. I also find it hard to believe that while flying in planes, watching television and eating genetically engineered crops, there are some of us that still refuse to accept the underlying truth of science. Yes, yes, I know, that's why they call it an obsession.
4. Strategy & Adventure Games - Have you ever looked at the watch and realized that it's tomorrow? Happened to me more than a few times. If I get into a good computer game (think Civilizations III) I simply cease to notice the passage of time.
5. Being Right - Everyone that knows me, knows that I am obsessive about being right. I hate being wrong, and I like to argue. A deadly combination, but in a lovable sort of way... Or... that's what I tell myself... obsessively.
Extra Credit Obsession - 42 - About a year ago, I developed a little obsession with the number 42... Wanna know why? Check this out: 42.
So, now it's time to return the meme into its natural habitat of the blogosphere. I call Not Made of Money; 1st Million; and Mapgirl, to come out and play! I hope you enjoy playing the game as much as I enjoy reading your blogs.
Subscribe to:
Posts (Atom)