November 2008 Archives

Trent over at The Simply Dollar blog had an interesting post this morning on "A Long December"; that is, how, for many American's December will be a tough month given job cuts, gift buying pressue, investment/401K performance, and the poor economy in general.

Trent's post got me thinking about my childhood and how my parents (pic: that's my mother on the left with my great grandmother and grandmother in Calabria in the late 1960's) handled tough economic times.  And I easily concluded that parents didn't panic much or for that matter pay much attention to recessions, the stock market, or even my dad's job (my mother did not work a formal job).  I'm sure my folks worried like everyone else, but I don't remember hearing or feeling any sense of panic from mom/dad.

As I sat in my home office this morning the book, "The Millionaire Next Door" stood out prominently on my wood bookshelf.  The book stands out because it's a classic in the personal finance world and can be easily understood by everyone.  I often re-read chapters of the book and can really identify with most of the content in the 1996 book - see the The Simple Dollar for a nice review of the book.

One of the key principles in the book centers on living below your means (regardless of income level, profession, or status); specifically, the author talks about how most closet millionaires live in modest homes in solid, but not ritzy, neighborhoods.  The principle got me thinking about how important it is, especially for a young couple, to purchase the correct home (and start a financial life on the right foot).  By correct I mean a home that is the right size, in the right neighborhood, and the right price point. 

Given that most of you will likely be interacting with family and friends on Thanksgiving Day, I thought I would offer some "how to" tips on getting along with your dinner companions:

- Be nice. Getting along with people is not rocket science.  If you're coming across as cold, snobby, and unwilling to engage in a conversation, you'll most likely be sitting by yourself watching some bad football game.

- Have a glass of wine.  I'm not advocating funneling a bottle of Cote du Rhone, but grab a glass of wine when you arrive and it will help you engage people in conversation and just make you feel relaxed.

One of my father's golden financial rules is to not buy what you think you need.  As I've said in earlier posts, my father is an incredibly crafty individual, though I didn't realize the full extent of his ability to improvise and save money until we purchased our own home.

As new homeowners most couples are eager to make home improvement and purchase stuff to help mend and repair a "new" home.  The intention to improve a home is a good one and should stay with the homeowner as long as s/he occupies the home, however the associated behavior to run to Home Depot or Lowes' for supplies, material, and equipment is questionable and potentially dangerous.

Many of the best personal finance blogs I read on a daily basis, including Get Rich Slowy (which Money Magazine called the most inspiring money blog today), The Simple Dollar, Free Money Finance, and Money, Matter, and More Musings focus on how to save money or lead a frugal life, however we often hear via the media that the US economy is tanking and that increased consumer, business, and government spending will be the only way back to more prosperous times.  The logic is that some group needs to spend in order for the economy to grow, or with the current economic crisis, stabilize.  And when consumers don't spend money on cars and LCD TVs (because of lack of funds or because they are simply being conservative) and corporations don't sign big contracts for services or equipment, the US economy grinds to a halt.

Sometimes it's obvious, but most of the time it's not.  What am I talking about?  I'm talking about how we, as humans, are comforted by following the pact or making decisions that everyone around us is making.  For example:

- We like buying Google stock because it helps us find things (there are alternatives) and the media loves Sergey and Larry.

- We like buying SUVs because they are safe (not really) and Bob has one in his driveway.

- We like buying Green because it helps the environment (not all the time).

- We like not saving much because easy credit is (once was) available.

- We like buying our own home because there's a tax savings (doesn't off set initial investment) and because we're told every American is entitled to one (not true).

Every time I travel to Europe (especially outside of the big cities) I notice that the stress level tends to be much lower than what we have here in the US (regardless of city or town).  Yes, big city folks tend to always be on edge (think of the typical New Yorker), but I've found folks from New Hampshire to Michigan and from Florida to Missouri to posses as much stress, albeit at a different level, than the typical city dweller. 

The whole thing got me thinking, can one really live a practical and cost conscious life if stress is present?  I'm not talking about occasional stress that is associated with a job or family, rather I'm talking about the constant stress that keeps you up at night or prevents you from enjoying the weekends or a nice meal.  

I used to work a pretty stressful job in a competitive industry and after a day at the office I didn't want to handle any of the practical living things I've been blogging about on Scordo.com; in fact, at the end of day all I wanted was a glass of wine and some food (preferably the kind that I didn't have to make myself).  Now, removed from the hyper-competitive industry and working a more sane job, I find time to cook, read, work on the house, and be with my family (all at the level that I want).

Coffee, in moderation, has proven to have some health benefits including:

- Coffee seems to protect men from Parkinson's disease
- Coffee drinkers may be half as likely to develop Diabetes
- Coffee might have anti-cancer attributes
- Coffee may not increase blood pressure as previously thought

(Source: Harvard Health Letter)

Regardless of health benefits most folks enjoy coffee because of 1., caffeine energy jolt 2., taste and 3. ritual.

Do you know those people who need to spend money in order to have a good time?  You know, the folks who inevitably see a movie, go out for dinner, buy a new pair of pants, and buy a few books at Barnes and Noble every weekend.  Well, it's easy to fall into the trap of spending to put a smile on your face or occupy your weekends.  I, for example, was addicted to buying books for a period of time; I would often head to the nearest super-bookstore on a Saturday morning and spend a good 2-3 hours looking for a few books to purchase.  I would justify the $70-$90 expenditure as a good thing because it involved reading and learning new things, but I was still spending on something I could easily get for free (namely, books at my local library).  Here, then, are five "Instead Of X" scenarios that you can look at this weekend:

(photo: left to right - my uncle, me, my father, and cousin)

I generally tend to buy whatever is fresh at my local fish market and when I saw fresh, wild, Flounder the other night I picked up a few pieces!   Freshness is always number one from a fish buying perspective, but the wild factor is a close second (fish that is on sale is also nice!).

Flounder has a meaty and mild texture (and is native to the Atlantic here on the East Coast) and is best prepared in a simple manner, like most fish.  By simple I mean the following:

It's about 60 degrees here in the mid-Atlantic States and, if you ask me, the perfect time to get a good fire going in your fireplace!  The reason I like to make fires when it's between, say, 55 - 60 degrees is that, in most cases, you don't need your central heating system to be on and you can enjoy a fire without it sucking all of the warm air from your home.

 

Well, what wine should you buy? This is a big question, maybe even equivalent to other big questions such as, "Does God Exist?" , "Do we have free will?", and the classic, "What is Truth?"  Unlike big philosophical questions, however, figuring out which wine to buy for dinner, keeping in the cellar, or just for a nice night by the fireplace isn't too difficult.

Because my preferences for wine are informed by my pallate, the foods I consume, and background, the following list of perferred wine styles (all Reds this time around) is just a suggestion. Drink what you like based on what foods you eat and your own personal background, but don't be afraid to experiment and ask your local wine guy/gal for recommendations.  The best tip I ever got was to walk into a wine shop and ask the salesperson to "build a case of wine" (say, in the $15.00-$30.00 per bottle range) with varried styles and world regions in mind.

A college professor once told me that most adults finish all serious reading by the time they reach the age of 23.  He went on to say that most professions, even ones that require a four year degree, do not require the worker to engage in prolonged or critical reading.  And while I'm sure there are exceptions to the statement, I agree wholeheartedly with the professor's conclusion.  Ask yourself, for example, what was the last serious novel you read or the last time you read The Economist from cover to cover (that's Immanuel Kant on the left, by the way; he wrote a Critique of Pure Reason and should be on your reading list)?

The Fall is the best time to both purchase and plant shrubs or trees.   On the purchasing side, most home centers and landscape shops are looking to clear inventory so you should be able to find nice deals (Home Depot, for example, has a 75% percent off shrubs sale currently).

In terms of planting, the cool days and nights are perfect for shrubs and trees to establish a strong root system and acclimate to the soil and a new location.

Barack Obama's recent victory and political campaign got me thinking, what does it take to be a successful leader or manager?  More specifically, I wondered about what specific, practical, traits a person needs in order to motivate and change people's behavior?  Afterall, effective communications is all about influencing someone so their behavior matches what you're trying to get across.  Here are some practical traits all good leaders and managers must possess:

Perseverance

Becoming financially independent is about setting goals and staying on track in order to achieve those goals.  In my view, most Americans are in poor financial shape (i.e., living on credit, spending more than they earn,  not saving enough or at all, etc.) because they have not set financial goals, partly due to not knowing how to do so (that's my great grandmother to the left, she knew how to set financial goals!).

In order to put your money to work you need to first prepare and set up your financial foundation and this includes:

Nothing says the Fall like slowly simmering meats in a big pot!  My personal favorite braising meat is the short rib.  According to Chow.com, "Short ribs are cut from different sections of the 12 ribs that start at the chuck (shoulder) and continue to the loin. Relatively square, short ribs have full-bodied flavor and luscious tenderness that develop when they are slow-cooked"

(photo: backyard fig in early September.  the fig isn't ripe as of yet, given color and texture).

For some people, going to the market for food is a weekly chore and for others it's an opportunity to purchase wonderful meats, vegetables, cheeses, fish, and fruits. It's probably no surprise that I fall into the later group and that I actually look forward to food shopping! However, it wasn't until I learned how to shop for food that I began enjoying looking for the ripest tomatoes, freshest cod, or just-roasted coffee beans. Learning how to shop for quality food is not rocket science, but there are some basic rules to follow (specifically in terms of produce and fish):

Fruit
This means not buying peaches, cherries, and Fava beans in the Winter, for example. You also don't always need to buy organic, but there are some fruits and vegetables that yield less pesticides when purchased in organic form, for example: grapes, apples, berries, pears, cherries, lettuce, tomatoes, and beans. Organic produce usually tastes better as well, but I'll often buy non-organic fruits and vegetables if the items appear fresher and are local (generally, and in my view, local is better than organic).

In terms of picking specific fruits at the market, look for ripe, but not too soft tomatoes and peaches that smell like peaches though not soft to the touch (buy them a bit hard and they will ripen nicely at home). You can apply the same technique to picking pears as you do to peaches, though you won't get any pear scent if you hold a pear to your nose at the market. Fortunately, there are fruits that you can just sample at the market and buy on the spot if they taste good (for example, grapes, cherries, strawberries, apples, and plums)!

Vegetables
When it comes to selecting vegetables things are a bit easier as you basically want to look for crisp green colors in vegetables like arugula, romaine lettuce, string beans, collard greens, escarole, dandelions, and Swis chard (brown or yellow is not good and leaves should not be wilted). A little dirt and a garden bug or two is a good thing (if bugs can live, then the pesticides aren't the kind that kills everything). If you're looking for onions or garlic make sure the outer skin is tight and shiny. Potatoes should be hard and not contain too many blemishes.

Fish
My wife and I eat fish about 2x per week and we only consume the wild variety including salmon, mackerel, cod, sole, flounder, scallops, trout, snapper, and trout as often as possible. Tuna and swordfish are delicious but we try not to have it more than 2-3 per month given mercury concerns (the general rule is the older the fish the more mercury it may contain). Good fish, as you probably know, is all about freshness and freshness can be measured if you focus on smell, texture, and physical appearance (fish should not smell fishy or have a slimy appearance and the texture should be firm and shiny). When it comes to fish the best thing you can do is to make friends with your local fish guy (ask around and folks will tell you where to get the freshest fish in your neighborhood).

Purchasing the finest foods is not about parking your car outside some random supermarket on Saturday morning and coming out with a week's worth of groceries. Getting the best fish may require a trip to the fish guy 20 minutes away from home (on Monday) and the best tomatoes and greens may be located at the farmers market a few towns north of your house (which is only open on Thursdays), for example. The bottom line is that if you have the time, food shopping should be done at local shops that have a particular expertise. You should also do your shopping as close to the day you will consume the food as possible (this is an old European market trick).

Happy eating!