AskDong

Bripblap tagged me (and a few others) to make a public declaration. I believe there’s a great deal of credence to making a public declaration. Telling the world that you’re going to do something makes it much a harder to back away from that commitment. I remember back in middle school I would tell my friends who I planned on asking to dance so I couldn’t just chicken out and not ask that person. I no longer have things quite as nerve racking as school dances anymore, but there are still more than a few things I could stand to do.

So my public declaration is: I will not check my portfolio more than once a week unless I’m trying to execute a trade or creating a specific report. I’m cheating a bit here since I already acknowledged this was bit of a problem for me. Up to this Monday, I probably checked half a dozen times each day on an average day. It’s really dumb and leaves me feeling like a younger, Asian version of Silas Marner. I don’t want to be that guy.

Given that I’ve already talked (not in detail) about my first public declaration in previous post, I should make another. Declaration Two: I will start going to the gym 2 to 3 times a week again. I haven’t regularly gone to the gym since April of this year. My gym membership lapsed last month, but I have $200 available in my preventive health care account that I need to use by the end of the year that I can put towards a new membership. My office also moved over the summer and the Gym that I would be joining is in the building which might help this declaration.

And to further propagate the meme I encourage the following bloggers to make their own public declarations.

• Ms. Money and Politics
• Laura at the Green Panda Treehouse

That’s it for my tags. I was never very good at tag in elementary school.

I’m not a follower of Dave Ramsey, but having read a lot of personal finance sites and blogs, I’ve come across his teachings and his books more than a few times. I applaud his efforts, and his success at helping thousand of individuals climb out of debt. That said, I don’t think his way is the only way. While I probably agree more than I disagree with Mr. Ramsey, his draconian attitude towards all types debt instruments is not for me.. I have over a dozen credit cards, but I don’t carry a balance. I have a mortgage, but it’s at a great fixed rate with more than manageable payments. I think like anything else borrowing money is just another tool. It’s not evil or bad in itself. I have no great love for many of the tactics that credit card companies employ, but I don’t believe them to be any more evil than many other companies. Personally I prefer the credit card companies over cable providers any day as there is more competition. Credit card companies offer a service and are trying to make money like any other business. Like any profit driven business, credit card companies are trying to keep customers and extract as much out of them either through interest payments or transaction charges (billed to the retailers). As long as there are number of credit card companies competing for customers, I’m generally OK with their business model.

Dave Ramsey, on the other hand, hates credit card companies, and all forms of debt with a passion. I’ve actually never read any of his books, or listened to his show. Most of what I know about him comes from post by other personal finance bloggers, and comments from other personal finance blog readers. While I think that most people who look to Dave Ramsey as a personal finance guru are more than reasonable, I have found a minority of his followers incredibly dogmatic in their approach to personal finances. Given that I’m not following his way and I have very strong moderate tendencies (I have a hard time accepting any one answer without also acknowledging some reason in the counter position), I raise an eyebrow when I see people espousing Dave’s way is the only way.

From what I understand of Dave Ramsey, his basic pitch is that all debt is bad debt. Don’t use credit cards. Don’t have a mortgage. I’m not a fan of debt either, but I don’t think all debt is bad debt. When it comes to actually down to paying debt, he pushes the “debt snowball” - pay down the smallest loan, and then move to next larger one once that’s been paid. Rationally speaking paying down the smallest debt doesn’t make sense, paying the highest interest loan does. However, I think from a purely psychological perspective Dave’s advice is good. People often need to feel like they’re meeting goals.

Again since I’ve never listened to his show or read his books, what little I know that comes from him directly is from his website. While I don’t agree with him 100% as I wouldn’t usually expect to agree with anyone 100%, I think his arguments are well constructed and don’t strike me as particularly dogmatic. However, I also know that Dave Ramsey has a strong reputation as a powerful speaker who draws on his own Christianity to illustrate points. I imagine some of his force is lost when his words are translated to text on a page. I guess the broader question is not why followers of Dave Ramsey’s are so dogmatic as much as why some followers of any expert/guru feel the need to disparage and completely discount any conflicting view. Personal finances can be complicated. I readily acknowledge much of it is behavioral and psychological rather than mathematical and rational. Exactly because of the large psychological component, I believe there are many different “right” answers.

My girlfriend the other day asked me if I was familiar with Michelle Hernandez, and I was. She was reading this article in BusinessWeek. Michelle Hernandez was the Assistant Dean of Admissions at Dartmouth College when I was a student there. There’s even a good chance she skimmed my application

Since her days at Dartmouth College both as Assistant Dean, and student, class of ‘89, Michelle has gone on to start her on own college consulting firm. She advises students on how to get into their dream college. She boasts a 90-95% success rate on getting students in. For this, she charges over 10,000 for a weekend session. I applaud her drive, her success, and her entrepenuralship. However, I’m not a fan of the business, and not fan on a few different levels.

High end services like Hernandez consulting by virtue of its high cost is a case of those with money further advantaging themselves through money. Given that there are limited spots in selective colleges, Hernandez by giving a leg up for one kid is taking spot from another. That other kid is likely a kid who doesn’t have the means to hire someone like Michelle Hernandez.

More fundamentally, I feel that the college application process has become too competitive. Kids should get into good schools because they’re smart, work hard, have talents, and various interests. Kids should not be getting in because they’ve hired a consultant to tweak the application, nor should they pursuing different activities just to pad the resume. I feel for many high schoolers these days, what should be a relatively stress free youth is now encumbered by the pressure of getting into the right school. I don’t want to downplay the value of getting into a good school – it’s very important. However, I fear that many young kids and their parents are failing to see the forest from the trees.

As an aside, I interviewed with Michelle Hernandez to be a campus tour guide. I didn’t get the position, but found her to be a very focused individual, and am not surprised that she’s found success in her consulting business. In hindsight, given what I said during the interview, it would’ve been idiotic for her to have given me the job. In short, I didn’t exactly speak of Dartmouth in glowing terms. I expressed the issues I had with the school. I had pitched my concerns as a way I could offer prospective students a fresh take on the College. I wouldn’t have hired me if I interviewed me. The admissions office wants to hire tour guides who can sell the college atmosphere, not disparage it. While I enjoyed my time at Dartmouth, for some reason during my interview I wanted to “keep it real.” — I’m still not sure why.

One of the first things I do when I get back from vacation is check on my portfolio. During this past vacation, I did not check my portfolio once.  This is becoming more and more difficult - not checking that is.  Internet access is rampant, and I usually bring my laptop along on vacation.However, ignoring my portfolio is immensely gratifying if not satisfying.  I don’t actively trade so there’s little reason for me to look at how my assets are doing.  Being up or down on short term basis is meaningless.  However, I imagine, I,  like many other people who tell others to ignore the day to day volatility,  are ourselves enraptured by it (even if we don’t do anything about it).  I also realize as my assets have accumulated I’ve probably become more obsessed with looking at the numbers on the screen.  I feel a bit like gollum at times, my precious….

I don’t want to be like gollum.  I certainly want my portfolio to do well, but there’s really no reason for me to be obsessed.  At best I should only have need to check once a week, or when major current events dictate that I take action.  The fact is if I’m interested in better investing, my time is better spent looking at new investments rather than current ones.  Though I was anxious this week to look at brokerage account after my vacation, it was more satifying on the cruise to be free of those thoughts.  Like anything else, I think ignoring the markets just takes some discipline - discpline that I hope I have.

I just go back from my cruise, and am catching up on my blog.  While I did have Internet Access on the cruise ship, it was .50 cents a minute.  As a result, I wrote my blog entries, and minimized my time online to just pasting and posting my articles.   I still ended up spending $10 for internet access.

Overall a good cruise. I’ve now been on three different cruise lines; Carnival, Norwegian, and now Royal Caribbean. Norwegian definitely had the best food. Royal Caribbean the best entertainment options. Carnival was my first, and was definitely the most convenient as I was able to take a cheap 3 day cruise.

While I enjoyed the cruise, I always leave the cruise (and any resort) experience feeling guilty. I always feel guilty about “living it up” when I know so many of the people serving me often come from impoverished 3rd world countries. Because cruise ships are typically registered in the Bahamas and do not operate technically in the U.S., they are not beholden to U.S. labor laws.  As a result cruise ships pay many of the service people the bare minimum in terms of wages.  Nearly all the compensation comes in the form of gratuities. This is not to say these are bad jobs for the people working at them. For many people these jobs represent a fantastic opportunity to lift themselves and their families from poverty.  They work hard, and I believe deserved to be tipped well.

The other sense of guilt I feel is purely on consumption. There’s so much food on board. I wonder how much of it ends up going to waste? I also wonder how much oil does a cruise ship use sailing around? It might be that cruise ships are very good about conserving food and energy. It’s not like I wouldn’t be eating and using electricity at home. However, the truth is I don’t know. I plan on spending the next week doing a little more research into the matter, and come up with an environmental impact study.