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My 401K Performance is Negative August 24, 2006

I’ve been contributing the maximum allowed for my retirement for the past 5 years, so my balance has gone up quite a bit. But recently, my personal rate of return for the period ending June 30, 2006 was: -4.12%. According to this CNNMoney article today, those who saved for their retirement from 1999 to 2005 have done well. Here are the average account balance in 2005 for the following age groups:

Are you on track with your retirement fund? I hope I get out of the negative territory for the next quarter!

Hip Hopper Ice Cube a Smart Saver August 20, 2006

I was browsing Men’s Health Magazine and saw an interview with rapper Ice Cube. One question asked was about his earnings:

Keep what you earn
“People love you today, but it’s off with your head tomorrow. I just keep it in perspective and never, ever buy into the lifestyle. I didn’t buy a house until I started selling records. Now I put my money into my business. Get what you need and a couple of things that you like. Everything else after that is just stuff.”

With that answer, he gained my respect. It’s refreshing to hear a celebrity in the hip hop world, where the more flashiness the better, saves up money before buying a home. With that thinking, I’m sure Ice Cube is financially free and can do what he wants rather than relying on his next hit song or movie.

US College Ranking and NYC-sized Income August 16, 2006

Each year, various publications rank the universities in the US. High schoolers and college students use these rankings to decide on where to go or how far up the ladder their current school stands in relation to other schools. The only value for these rankings for post graduates, like myself, is purely for the resume and to say that you went to a top 10 school or a ‘top tier’ school.

Many students for graduate education focus on jobs and potential income for selection to universities, but in this day and age, a bachelor’s degree is the baseline for a ‘decent’ career. An article in today’s NY Times states:

Today the United States ranks ninth among industrialized nations in higher-education attainment, in large measure because only 53 percent of students who enter college emerge with a bachelor’s degree, according to census data. And those who don’t finish pay an enormous price. For every $1 earned by a college graduate, someone leaving before obtaining a four-year degree earns only 67 cents.

I found the last sentence interesting. I guess being a professional in NYC attracts other professionals and college educated people, so I don’t normally think about people’s educational background. I assume everyone went to college. I went to a top 10 university (according to recent rankings in US News & World Report), but I rarely think that I am smarter than anyone else. In fact, there are so many smart people around me that I feel that I’m normal in terms of educational background. And I certainly don’t make close to Investment Banking or Attorney dollars.

In fact, in the very same day, the NY Times featured an article titled “New York Area Is a Magnet For Graduates“. According to the article, in 2005, in Manhattan, more than 57 percent of all residents had at least a bachelor’s degree, up from 50 percent in 2000. Of course this brings up the issue of lack of affordable housing, lack of people who are willing to work hard labor jobs, and the decline of artistic or creative types in NYC. Considering that average apartment is over $1.2 million, that brings up my previous question, how do these people have so much money? If I didn’t budget my money and wasn’t aware of all the personal finance topics that the PF community brings to me, I would not be able to live anywhere near NYC. The income gap between the rich and poor makes me nervous that NYC will not be affordable for anyone but the top 1% of earners in the US.

Sources:

When to Purchase Airline Tickets August 8, 2006

Great tip from SeekingAlpha on the best time to purchase airline tickets:

What’s the absolute best time to purchase a ticket directly from the airlines? Turns out it’s Wednesday from midnight to 1a.m. in the time zone of the airline’s “home base.” (For instance, Delta is headquartered in Utah and United currently calls Chicago home.)

Why? That’s when the computer systems of most airlines get rid of the reserved but unbooked lower fare reservations. Most of us at one time or another have booked a reservation, then let it go without purchase. Snap-up these discounted fares right after this happens and you’re likely to get a significant discount.

I like using Kayak.com to search for airfare since they consolidate airline searches from one website. Thanks SeekingAlpha!

Related:
Saving on Airfare
More Airfare Saving Tools

$15.4million Dance Lessons vs. My $70/hour Lessons August 3, 2006

I saw this article in today’s Wall Street Journal about an investment banker at HSBC Hong Kong who paid $15.4 million for eight years (half of the amount up front) to secure unlimited Latin dance lessons from 15-time world Latin dance champion Gaynor Fairweather of the UK and her Italian husband, dancer Mirko Saccani.

Mimi Wong, a 61-year old widow claimed she was “looking for the last bit of glory in life.” Her extravagances are nothing new to Hong Kong, where there is said to be no shortage of big spenders. However, an Argentine dance instructor offering lessons there at a more modest rate of $70 per hour commented, “It’s just ridiculous. No one could actually take enough lessons to make it worth it.” Never mind the costs, dancing is serious business in Hong Kong and Wong is known for seeking perfectionism at any cost. She is now in court suing her instructors for the return of her prepayment following an embarrassing and threatening incident she suffered at the hands of Saccani at a mock dance competition. According to court documents Saccani shouted at her to “move your arse” and called her a “lazy cow” in front of fellow dancers. After this incident Wong came to realize the money involved for her lessons was “stupid,” “crazy” and “completely out of hand,” leading to a further falling out between them. Soon thereafter, she won a court order to freeze her instructors’ bank accounts. Although the publicity surrounding her obviously isn’t good, HSBC is standing behind its top Asia banker. A judgment in the court case is expected later this summer and in the meantime Wong is paying a new instructor $21,000 per month.

I know people can do what they want with their money, but this seems to be a case of ‘out of touch with reality’. I’m sure this banker has the means and money, but that’s a lot of lessons for 8 years. And at 61 years old, she’d be 69 years old by the end of her ‘lessons’.

I also took dance lessons with my fiancee before getting married so we look like we know what we’re doing. It was another wedding expense that I hadn’t anticipated, but it was well worth it. We had a friend who knew an incredible dance teacher who has been in those Gap clothing commercials a few years ago and in movies such as “Mona Lisa Smile” with Julia Roberts. He gave us the friends rate at $70 an hour. We had 6 lessons which was perfect for our first dance preparation. It was one more thing I didn’t have to worry about on the day of our wedding. It was well worth it in our minds. But then again, maybe that’s the way the super rich, like Mimi Wong thinks when she agrees to a $15.4million dance lesson…until she realizes that she paid enough money to feed a starving country.