Archive for August, 2006

If you want to be rich, stop being so frightened

Business & entrepreneurship, Personal finance

I came across an article written by , a British publishing mogul, a couple of weeks ago and meant to mention it here. It’s called (apparently an excerpt from his forthcoming book), and I think it’s well worth reading because it’s rare you get the perspective of a multi-millionaire that’s written so candidly. Sure, some of it might be a bit obnoxious, but it’s still worth a read.

We hear all the time about how peoples’ goals are to become rich multi-millionaires, but do they really know how much effort, time, and luck it takes? And the type of sacrifices involved? And does all that money really change your life or bring you more happiness? All these questions and more are answered by Mr. Dennis in the article.

I’ve had the fortune to know many entrepreneurs and a couple of CXOs of public companies in my time, and the truth is that after discovering the lifestyle they lead, I realize that I am personally not cut out to be a CEO of a large company.

I’d guess that in 99% of the cases, in order to succeed at that level, you must dedicate your whole life to building your business and career, and though there’s anything wrong with that, the truth is that I doubt that I personally be willing to give up time spent with loved ones in order to build my business into a large enterprise.

I realize what I’m saying here will probably be seen as cowardly by some people. I’ve read Kiyosaki’s books, I do believe that he has some good points. But in the end, I think the question boils down to finding that right balance between your life and time and having enough money.

A while back, I read , which I greatly enjoyed, and which also opened my eyes. It blew away several misconceptions I had of entrepreneurs. I was surprised to discover that he had no first-hand industry knowledge of his first business, merely the idea that it ought to work and the drive to make it happen.

And the amount of sacrifice, risks, and court battles with British Airways he undertook to get Virgin Airlines to work was inspiring and downright scary. I think I would have cracked under the pressure and overwhelming odds. I still admire Branson while realizing that I don’t think I’ll ever be able to become someone like him.

But rather than read my ramblings here, why not check out that article instead?

Wednesday update

Blogging, Personal finance

Be sure to check out this week’s Festival of Frugality over at Punny Money. There’s a simple and nice one on — a nice article about how to make your backyard bloom cheaply, and what’s more, it’s a great motivator to get to know your neighbor better and build up a sense of community.

Also, in the more-lists-than-you-ever-wanted-to-see category, check out the link to the left on another group writing project from Darren Rowse. This time, he’s giving away five prizes at random, so submissions have gone through the roof. Lists range from the weird, wonky, and humorous to the introspective on almost any subject you can imagine.

Using Treasury Direct to buy T-bills

Personal finance, Value investing

One of the pitfalls of taking action as you learn is you occasionally make mistakes. This happened to me recently, after happily having bought some and then realizing that there were better options out there now that we live in California (with its 9.3% income tax rate) and not Washington state (which has no state income tax).

Once again, ignoring tax implications proves perilous. But, at least I was able to find a better place to park my cash: .

Why? Unlike the CDs I purchased, interest earned from T-bills aren’t subject to state income taxes.

In fact, depending on your state income tax rate, T-bills might be a much better investment than a regular CD. For Californians like me, here’s a list of the equivalent annual percentage yields (APYs) based on the 8/17/06 1-month bill (via the on Fatwallet):

Unadjusted APY ………………. 5.29%
Itemizers (deduct state tax)…. 5.83%
Non-Itemizers @ 15%………… 5.94%
Non-Itemizers @ 25%………… 6.04%
Non-Itemizers @ 28%………… 6.08%
Non-Itemizers @ 33%………… 6.14%
Non-Itemizers @ 35%………… 6.17%

These are higher than the 5.3% and 5.4% 3-month CDs that I purchased (subject to state income tax) and moreover, they’re shorter-term. In fact, current rates for the 1-month T-bill are higher than the 3-month T-bills as well.

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Top 7 freebies I’ve received

Tips for saving money

Here’s a thrifty tip that’s actually fun. One of the easiest ways to fight that acquisitive temptation is to go for freebies. There are a couple of sites that list free items, like Fatwallet or Slick Deals, and if you think of it as window shopping, the fun comes twice, in occasionally finding and signing up for something worth getting, and then when you receive it in the mail a few weeks later.

I thought it’d be fun to list the top 7 freebies (in order of value) that I’ve gotten over the last 9 months or so:

1. Cubic zirconium necklace: This was a fun little surprise for filling out a survey on a nail product. It was a cute thing, not worth very much, but a nice gift for a young girl if you decide not to use it.

2. Pedometer: The US Dept. of Health and Human services created a 7-week challenge this summer to get women walking and exercising, so anyone who signed up in time got a pedometer as part of the challenge. (As the narrator from Frontline quipped in a recent program, “Americans are highly competitive and gadget-centric, so maybe a pedometer is the best chance to get the nation to exercise.”)

3. Pet pedometer and ball: A pet pharmaceutical company offered a pet pedometer for filling out a survey on the health of your dog. The pet pedometer was actually nicer than the human one I received, and it came with a nice rubber ball, too. Too bad the pedometer was too big for my dog!

4. “Doctor in the House” Black handbag: Consumer Health Education Center (CHEC) was offering this nice freebie to anyone who wanted it, along with useful literature about precautions mixing over-the-counter medications. (The theory was that women and mothers tend to be the “doctors” of the family, so the gift was targeted at women.) A surprisingly nice bag!

5. Omaha Steak Burgers: A rather spammy survey site was offering a $25 gift certificate toward purchases at Omaha Steaks, so I used it to buy some burgers. Looking forward to these!

6. Tumi Accessory Bag: Same as above, but this time a survey offered by Tumi. $25 toward the purchase of anything in their store, so I chose a bag.

7. 1-year print subscription to Barron’s: E*Trade customers were offered a complimentary 1-year subscription to Barrons (worth $149). Despite being E*Trade customers, I found out about this nice deal from Fatwallet. This is the highest-value freebie I’ve received, not to mention a perfect one for my profession and this site.

I’ve also gotten a few free razors, cosmetics, and lotions from manufacturers, which will come in handy after I had to toss most of my cosmetics into the trash when I travelled last Thursday. Argh!

So how do you get these? It’s not too hard, especially if you’re into window-shopping. You just have to check the sites listed above from time to time and see if there’s anything worth getting. In general, freebies come from filling out surveys, educational promotions (like the pedometer or handbag above), and manufacturers promoting new products. If you’re filling out surveys, it’s probably wise to use a throwaway email address, because spam often does come.

Of course, there are some ethics involved. Personally, I don’t fill in any surveys or sign up for medical freebies offering products for those who actually could use them. There are also freebies that aren’t worth having or that don’t come.

It’s always a bit of a roulette game, but hunting for and getting freebies does allay some of that buying urges that we all have from time to time.

So what are some good freebies you’ve gotten?

Does consumerism drive innovation?

Current events, Personal finance

I’m traveling today so instead of writing something long here, I’ll turn your attention to an interesting contrarian paper that claims the US is in great position to continue to lead innovation thanks to our insatiable appetite for buying new gadgets. The academic paper, presented in late July, was mentioned in last week’s Economist under the title , but you can read the full original text at the author’s website as well.

While the paper might be light on hard data, I always like giving a chance to ideas that go against prevailing beliefs (in this case, that the US is dangerously lagging in math and science and up to our eyeballs in debt, and nothing good can come of either situation). Here’s an extended quote from the article:

[The] sort of upstream innovation (the big ideas of those scientists and engineers) most celebrated by those who fear its movement to China and India is the hardest to keep locked up in the domestic market [because innovation is not constrained by national borders].

The least internationally mobile innovation, on the other hand, is the downstream sort, where big ideas are made suitable for a local market. Mr Bhidé argues that this downstream innovation…is the most valuable kind and what America is best at. Moreover, perhaps the most important fact overlooked by the techno-nationalists…is that most of the value of innovations accrues to their users not their creators — and stays in the country where innovation is consumed. So if China and India do more invention, so much the better for American consumers. The most important part of innovation may be the willingness of consumers, whether individuals or firms, to try new products and services.

The article doesn’t mention if Bhidé addresses how we’ll pay other countries for driving all this high-tech innovation our way, but I’ll share my thoughts on this later once I’ve read his paper and given him a chance to explain.