Archive for June, 2006

Group writing project: What would you advise?

Personal finance

I received the following question from a reader today, and I’d like to follow in Darren Rowse’s footsteps from Problogger and open up the question to readers and other bloggers to answer, especially because I don’t think there’s only one “right” answer:

I like to setup my finances on a “purpose” basis. I create a separate account for each specific saving target. I have 401ks or IRAs devoted to long-term savings. A checking account (and a small savings account at the same bank) to handle day-to-day expenses. Some CDs as a safety net in case I lose my job. A separate savings account for spur-of-the-moment spending.

This keeps things tidy and reduces the tempation for my spur-of-the-moment spending to hamper something important (like next weeks groceries).

This works great for short-term or long-term savings. But not so well for mid-term savings. Things that are maybe 3-7 years out. (Like buying a new car or saving for home remodelling.) I can’t figure out what the best vehicle is for carrying this out. I can take more risk (and want better return) than savings accounts and CDs, but it’s not so long that I want too much stock exposure.

It just doesn’t seem like there’s a good way to create a single account to handle this sort of time-horizon.

Maybe the answer is on your site somwhere and I haven’t been able to find it. Any suggestions?

Here’s how the group writing project will work. If you’re interested in participating, just do the following:

  1. Write a post on your own site that addresses the reader’s question below
  2. Send me the link (URL of the post) and the title of the post
  3. I’ll create a separate post showing the original question and an up-to-date list below the question that links to all other bloggers’ responses.
  4. Let’s set the cutoff for posts at Friday, July 7th at midnight (Pacific Coast Time), so that I can send a quick summary at the end of the week.

This is a great way for newcomers to build links and grow some traffic (just keep in mind that my site’s averaging a little less than 100 visitors a day, though it’s growing). I benefited quite a bit from Darren’s group writing projects, so I’m trying to pay it forward, though in a (necessarily) smaller way!

Sound good? This is my first time attempting this, so let me know any feedback you have!

Solve this fun little riddle

Personal finance

It’s almost the end of the week, World Cup play starts up again tomorrow. Just for fun, let’s keep those neurons running with a riddle:

    The rich want it
    The poor have it
    It’s greater than God
    It’s more evil than the Devil
    And if you eat it, you’ll die.

    What is it?

This riddle’s been around for several years, so you can find the answer fairly easily online with the right keyword search. If you can’t find it there, the answer is the first word in the second-to-last sentence of the second paragraph in the “About & Contact” section of this site.

Benefit from recent developments in cheap travel

Business & entrepreneurship, Internet, Tips for saving money

Here’s a spate of new sites and services to keep an eye on (or use, if you’re lucky enough to live in one of the cities they serve):

  • : figure out the best way to get around a new city by foot, bus, or metro. Currently in beta release, HopStop currently serves San Francisco, NYC, Boston, and DC, with other cities coming soon. Like Mapquest, you simply enter in your current location and destination, only this site tells you how to get there by foot and public transportation, not by car!
  • Buy your airplane ticket now, or wait and hope the price drops? Figure it out using : Good news if you live in Seattle or Boston. This company just launched a public beta a few days ago to serve these two cities (though it plans to include all domestic airports by year-end).

    If you’ve ever wondered whether you ought that plane ticket now now or wait ’til later and hope for a price drop, Farecast will help you make that decision. The company uses complex modelling algorithms to predict trends in airfares and advises you whether to wait or buy now, along with confidence levels about the accuracy of its prediction.

    The downside is that only two cities are being served at the moment, and low-cost airlines like Southwest and JetBlue aren’t included. They offer a dizzying array of graphical analysis and displays (which might need to be simplified for the average consumer). Another site offering related services is FareCompare.

    Both these websites are pretty new, but it’s always nice to see another service that creates better-informed consumers.

  • Traveling to Europe? Consider : This Irish airline serves several smaller airports all across Europe, much like Southwest does for the US. In fact, it’s even more profitable (22% margins) despite its low-cost emphasis. Not only that, but it aims to offer to everyone in the near future, and it’s not too far-fetched: 25% of its passengers already fly free. When we were living overseas, Ryanair would offer promotions like flights from Ireland to anywhere in Europe for 1&#8364.

    The way Ryanair operates is to charge a small fee for amenities (like food, checking in baggage, etc.), and to drastically cut any costs and unnecessary features from its planes that it can. It also offers advertising on the side of its planes to large corporations (sort of like an Internet model, where content is free because advertising pays.) Other low-cost airlines in Europe include and . Just in case you get tired of using a pass.

  • Prepare for the GMAT with Princeton Review

    MBA topics

    A few friends are beginning their preparations to , the required entrance exam for most business schools. The GMAT differs most standardized tests out there in a few important ways:

    1. It’s entirely computer-based
    2. There are no set dates: You can schedule a time to take the GMAT at any local test center at any time
    3. The test is adaptive, meaning there’s an algorithm that will give you increasingly harder questions if you answer them correctly, or easier ones if you make errors

    As if that weren’t enough, many of my close friends are already very uncomfortable with standardized tests because they think they were always bad at math, because they’re already intimidated before the test even starts, or because they approach the test the wrong way, as something that truly tests their knowledge.

    I always recommend the same thing to all of them: use the Princeton Review books. Their approach toward test-taking is irreverent but effective, almost like a game. And it works. For the GMAT, I highly recommend Princeton Review’s Cracking the GMAT. The 2007 edition was just published a couple of days ago.

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    Being fashion forward can be frugal if you know how to do it

    Tips for saving money

    My final commentary on posts from the carnivals I’ve participated in this week is one from yesterday’s Festival of Frugality. Rebecca explains how watching fashion trends is frugal and shares some great tips on how to get the biggest bang for buck. Like many posts from that Festival, her advice is worth reading, and here are some more thoughts I have on the subject:

    If you want to look truly fashionable, ignore US media. We’re a good 3-4 years behind the rest of the world. In fact, if you’ve ever checked out Vogue on the newsstands, you’ll notice that the British version differs from the Italian version, all of which are much different from the US version. Can’t find these imported magazines? Don’t worry, save the $10 and go online. My favorite fashion site to visit is . (I’m strongly biased toward fashion from Spain and Italy.) You don’t have to read Spanish, but you can browse through the “Moda” section to see all the new styles and trends. “Tendencias” (trends), “Top 10”, and “Mode en la Calle” (snapshots of real people walking down the street that Vogue considers fashionable) are also great to browse through.

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