Archive | November, 2012

Amazon: The Greatest Gift Giver of All

Looking for the next in the series of Rut Busters? Well, my laptop has died, so I’m delaying the next post. A preview of the title though: “Rut Busters: Preventing the Rut”

This is a longer post. My recommendation: Use Amazon Wish List for your Christmas list. 
Read below for some more specifics, and for details of how I evaluate new tools like Amazon Wish List.

Have you ever dealt with everyone in your family, and maybe even your friends, pestering you for a Christmas list, or a Birthday list?

Well, just in time for Black Friday (I hate that day, by the way)

Every year, it’s a constant flow, starting around mid-November for me.
“Can you send a list”
“What do you want for Christmas”
“Do you have a list yet”
“I’m going shopping tomorrow, what do you want?”

I always dreaded these questions, because I never knew what I wanted. Usually, I would pull together a combination of DVD’s I kind of wanted, a couple of books, and some gift cards. This was always nice, but it never captured what I truly wanted.

Solutions for Christmas (or other Holiday) Lists
I think there are a few criteria for a good Gift list. Whether for Birthday, Christmas, Hanukkah, Mother’s day, Father’s day, or any other day on which social protocol dictates that you exchange gifts.

The criteria for a good gift capture device is:

  1. The ability to capture the gifts you want (duh)
  2. The ability to access the list from multiple devices (sometimes you need it on your phone, sometimes your computer)
  3. Easy to send off to family members
  4. Easy for family members to read
  5. Easy to capture where the item can be purchased

There are, of course, a few solutions for this problem. So, like any good nerd, I have a chart!

Typo: The “Note on your Phone” only scores a 2
As you can see, Evernote comes close. You can capture what you want, access it from wherever you have an Evernote account set up. You can e-mail a note from Evernote easily, and it’s fairly easy to read. However, to capture where it can be purchased is a completely manual step, and if you make updates, you have to send out the note again. 
Close, but not perfect.
Enter Amazon Wish List
Amazon has a service which has been available for a long time, but just recently has caught my attention. It allows you to capture a list of items you want, and you can easily send them out to your family and friends (or even Facebook and Twitter) This way, you capture everything you want, all year long. If you decide you want something from your list at some point during the year, you can just buy it. Anything you don’t buy is on your list for your Birthday, Christmas, etc.
When your friend or family member orders something from the list, it actually removes it from your list! It works just like a wedding registry. In order to maintain the surprise, though, when you log in, it will still appear in your list for a few weeks, to maintain the surprise. 
But Paul, what if what I want isn’t on Amazon?
That’s fine! There are widgets (extensions, widgets, etc.) for each of the browsers that let you add items from any online store to your list. Additionally, you can add any item to your list manually, even if you don’t have a link! To get these widgets (available for: Chrome, Firefox, IE, Safari, and iPod) go to this link.
But Paul, what if someone buys a gift from another website?
Amazon can still be updated. However, it does require someone to click “buy it somewhere else”, and then they can mark the item as purchased.
This gets your friends and family an up-to-date list all the time. Also, as the season moves along, you can make updates to the list, and they will automatically have those changes when they go to check it out. It really is the best solution available!
What does it look like?
Simple enough, my link is below, so you can see what I am wishing for, and also to see how it works.
There you have it – the newest in my arsenal of tools!

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Rut Busters: How to Bust out of the Rut!

This will be the first post in a series on Rut Busting.

Ruts Suck.

They also happen to just about everyone. Some people are so motivated that they rarely get into a rut, but I’m willing to be that everyone out there gets them. (If you don’t, e-mail me at paul@padorec.com and tell me about it)

So how do you bust out of a rut? 

I was recently in a bit of a rut…actually, it was a major rut. Here’s how I spent my days:

  • Grazing in the kitchen
  • Going to work and kind of hating it (okay, hating it)
  • I watched every episode of Frasier available on Amazon
  • I watched every episode of How I Met Your Mother (again)
  • I downloaded and watched every episode of Boy Meets World
  • I started embarking on a trek to watch every episode of The Simpsons (About 166 hours of time, or 1 week of life)
  • I would eat Chinese Food nearly every day from a take-out place
This is a sad, pathetic life!
So, how did I get out of my nasty old rut?
I wrote a journal entry – probably the longest of my life
I spent probably 30-45 minutes writing the longest journal entry I’ve ever written. It got a lot of the issues out of my head so that I could deal with them, and start to realize what was stifling me. I also realized where my issues and mental blocks were originating, so that I could begin removing impediments to a good life.
I read a book about motivation
The book is great. I literally downloaded and started reading it while in a drive-thru line. The book was 100 Ways to Motivate Yourself and it really showed me the light. I didn’t follow every tip (or even read all of them, actually) but it was enough to really get me moving. (Full disclosure: I get a small cut if you click on that link – the non-referral link can be found here) I have since read a number of books which have helped to motivate me. You can find your own books, but I recommend 4-hour work week, Vagabonding, I Will Teach You To Be Rich, 7 Habits of Highly Effective People (I’m working on this now, actually)
I started watching a bunch of YouTube videos
I know, this sounds like it’s actually part of the rut. Here’s the rule: If you are watching Kittens in Teacups, or guys getting hit in the balls…it’s probably part of a rut; if you are watching self-improvement videos, then you can count it as a win. Part of getting out of a rut is to have a purpose. Now, if you’ve been proactive and written a personal mission statement, or defined your life goals (as well as yearly and/or monthly goals), you should be able to develop some momentum based on these. I had not done so, so I actually watched a bunch of Sumo Dojo videos from the guys at App Sumo. I also watched quite a bit on Elon Musk (one of my business Idols) and Tim Ferris (Lots of helpful information, but not an Idol). Shark Tank also really helped me to break out of my mental block! 
I set small challenges
I did a weekend juice fast. This was difficult after eating a bunch of Chinese food, but I did it. 
I began minimalizing my possessions. I realized that I had so much stuff I felt weighed down by them when I was home (I travel weekly for work). This is an ongoing practice. I’m a classic pack rat, so I’m working to get rid of stuff. The key to small challenges is to get momentum. It’s hard to go from doing nothing in life to writing a huge novel. It’s a different challenge to go from nothing to doing 10 push ups a day, or drinking 8 glasses of water a day, or writing for 2 minutes a day. Any small win builds momentum and is a self-fulfilling cycle.
I had some time with Family and Friends
This sounds so cliche, so I almost hate to put it in here. I spent more time with Family and Friends. There are 3 pillars to life – Health, Wealth, and Love. I was working on the Health, the Wealth was doing okay for my age (but not as well as I wanted it to go) and the Love was sorely lacking. A lot of people take “Love” to mean sex. Love doesn’t refer to intimate relationships alone; it can be any sort of relationship – including family and friends. The biggest secret of all is that it can also refer to the relationship you have with yourself. If you are sick of yourself, you need to work on that! I had grown a bit sick of looking at myself in the mirror myself, because I saw an unmotivated guy in a rut! I have since fixed this, and now I look at myself in the mirror and think “Damn, that guys a sexy, motivated, successful guy”. 

That was it – how I got out of my rut – it started with small changes which gave me momentum to lead to bigger changes. Simultaneously, I was focusing on the parts of my life which were lacking – namely health and love.

Keep in mind that this did not all happen at once. I started with Shark Tank (I watched every episode from the beginning once I ran out of Boy Meets World), and things grew from there.

So, once you have the momentum, how do you keep it going?
That’s going to have to wait for the next post.

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Entrepreneurs vs. Small Business Owners

I’d like to clarify something that is a small pet peeve of mine. It’s the difference between Entrepreneurs, and Small Business Owners.

Some people obsess over they’re, their, and there. For others, it’s to, too, and two. For others still, it’s where, we’re, and were. For me, it’s Entrepreneur and Small Business Owner.
An Entrepreneur is someone who uses his innovative nature, ingenuity, and creativity to effect major change in business.
A Small Business Owner is someone who owns a small business
Sometimes, an entrepreneur is a small business owner. Sometimes, a small business owner is an entrepreneur. They are not one in the same.
By this logic:
  • A McDonalds owner is a Small Business Owner
  • The founder of Mint.com is an entrepreneur
  • An employee at Exxon who finds a new way to sell oil in a more effective and clean way is an entrepreneur
See, you don’t have to be a small business owner to be an entrepreneur!
The reason I bring this up is that I just saw this video:
This video annoys the hell out of me, because it does not make any distinction on the terminology. 
Remember, just because you work in a corporate environment doesn’t mean that you can’t be entrepreneurial. Being entrepreneurial in a corporation is how you get big promotions, and ultimately how you end up running one. Those “big whigs” didn’t get there by playing by the rules and following the status-quo.
Note that I am not bashing small business owners here. Small business owners are greatly helpful to our economy as well, and there is a place for them. Just because you use a model that has been tested to work in the past doesn’t mean you are doing anything wrong! Just call yourself the right thing – you are a small business owner.
So, a recap:
  • Convenience Store Owner = Small Business Owner
  • Convenience Store Owner who offers an innovative new loyalty program = Entrepreneur
  • Google employee who thought up gmail = Entrepreneur
Got it? Good. 
Knowledge is power!
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How to Get Free Money and Retire a Millionnaire

This is a follow-up to the post Don’t be Poor When You Get Old.

I gave an outcry in the previous post. In case you missed it, here is the gist of it:

Invest in your retirement account, right now. No matter what. Even if you can get $50 a month into your account, you’ll turn that into hundreds of thousands by the time you retire.

You can literally turn $6,000 into $150k!
(See dinkytown.net to run your own numbers)

But how do you get your 401(k) set up? What should you do?
Well, there are a few simple steps. This is a long, informative post. If you don’t want to read all of it, here’s the steps in a nutshell.
1. Figure out if you have a 401(k) available, and whether your employer offers a match
2. Sign up and take full advantage of the employer match
3. Invest in a target retirement date fund, or do more research and build your own portfolio
4. Retire in style

1. Figure out if you have a 401(k) available, and ask how to sign up

Contact your HR representative or Manager, and ask if your company has a 401(k) available.
You can use the following e-mail or script:

E-mail

Dear [Insert HR Rep or Manager Name],

I have recently been thinking about my financial future, and would like to begin investing for my future. I have heard that I may have access to a 401(k) through [Your Company], and would like to ask a couple of questions.

1. Does [Your Company] offer a 401(k) program to employees
2. If so, do I qualify to participate?
3. What are the necessary steps to set up my account, and begin having automatic withdrawals sent to the account? 

Lastly, I have heard that some companies offer some sort of match as part of their 401(k) programs – does [Your Company] offer this benefit? If so, I would love to hear more about the options available to employees. 

Thank you in advance for your help.
Kind Regards,

[Your Name]

Phone Script

HR Rep: Good Afternoon, this is Pat

You: Hi Pat, this is [Your Name]. How are you doing today? 

Pat: I’m fine, how are you? 

You: Just Dandy! Pat, I have a couple of questions about some of the benefits available to employees, and wondered if you might be able to help me out. 

Pat: That’s what I’m here for! 

You: I have recently been thinking about my financial future, and I was wondering if [Your Company] offers any sort of 401(k) program for employees. 

Pat: Why yes we do! We have a 401(k) set up with a generous match for all employees who work at least 30 hours per week. 

You: Well that is great. What would I need to do to get my account set up?  

Pat: Well, there is a form we will need you to fill out, which will authorize us to begin deducting 401(k) deposits from your paycheck. Once your account is set up, though, the account can be fully managed online. 

You: Perfect! Could you send me a copy of the form, or even better yet, is there a website where I can print it out myself? 

Pat: Well, I can certainly send you one, but the easiest way is to download the form from www.yourcompany.com/401k. Once you have it filled out, you can send it in to the address on the form, and we’ll get you all set up. 

You: Great, I’ll do that right away. I have one last question – you mentioned a match for employees who work more than 30 hours. Currently, I work 32 hours a week – could you tell me more about the match? 

Pat: Certainly – [Your Company] understands how important saving for retirement is, so we will match 100% of your contribution, up to 2%, and another 50% for the next 4% [Don’t worry about what this means – I’ll explain a little later in this post] 

You: Well that certainly is generous! Thanks so much for the information Pat. Is there anything else I should know about the 401(k) 

Pat: Nope, that’s it, just get the form in to our office and we’ll get you set up. And make sure to contribute at least 6% if you want the full match! 

You: Well thank you for your help, I’ll get that in to you right away. Have a great day Pat!
*click*

Now, if your employer doesn’t offer a 401(k), then you’ll want to set up a Roth IRA. The simplest way is to walk into your bank and say “I’d like to open a Roth IRA”. They’ll take it from there. If you want to have a little more control, understand what a Roth IRA is, and how to handle it yourself, here is a great post from Get Rich Slowly: How to Start a Roth IRA (and Where to Do It)

If they do have a 401(k)…

Step 2: Sign up for your bloody 401(k)

This is an easy one – if you followed the instructions in step 1, then you know exactly how to sign up. Don’t do it tomorrow, don’t do it next week, just take the 5 minutes and do it today. This is not a thought provoking exercise, so you should not wait to complete it – just get it done already!

You should contribute at least enough to get any employer match that you have available. So what is this employer match, and how do you interpret it. In a few words, an employer match is free money.

If your employer offers 50% on up to 6%, what does that mean? That means that for every dollar you put into your 401(k), up to 6% of your salary, your employer will put another 50 cents in there for free. What does this mean for you? In 40 years, it can mean an extra $400,000 to retire on!

If you get a 100% match instead of the 50%, then it’s even better – it means you get a dollar for dollar match. For every dollar you contribute, your employer will give you a dollar. Isn’t that incredible!

I recommend contributing enough to get the full employer match, but remember, if you can only contribute $50, or even $10, it’s a good start. Begin with that, and then make it a goal to increase by a little bit whenever you can (an extra 5 dollar every month until you are getting the full match, perhaps?)

Step 3: Invest the Money Wisely
Okay, you have a retirement account set up. For starters, you can brag to your friends, and even be a bit snobby. “Well, my retirement portfolio is already shaping up quite nicely” They’ll be jealous…trust me.

But now that you have money in there, you can invest it in a number of mutual funds – exciting, right? Scary? Horrifying? Making you wish you had just kept spending that money on video games and beer?

Okay, here’s your trick – find the target date fund (this can go by a few different names) that coincides with your age. This is the simplest way to invest, and works for 85% of the population.

Basically, you put your money in a specific fund based on when you want to retire. Since I was born in 1988, then 1988 + 65 years = 2053. I would invest in the 2050 target date fund. Don’t pull the “I plan on retiring at 40” crap, just take your birth year + 65, and be done.

What this does is it has the company that runs the fund take your money, along with billions of other dollars, and invest them the way that someone your age should. This means they will invest in a proper mix of domestic equities, international equities, t-bills, muni’s, REIT’s, TIPS, etc.
If that last sentence made your head spin, then a target date fund is right for you.

If you want to create your own portfolio, then that is beyond the scope of this post, and you will need to do your own research.
Here’s a start:
Rebalancing & asset allocation: Critical for investing. So why don’t you do it? by Ramit Sethi
Retire Earlier by rebalancing your 401(k) with the Swensen asset model by Steve Mz

If you’re lazy…go with the target fund.

Step 4: Retire in style

Need I say more?

Disclaimer: I am not a financial planner. This post is for informational purposes only. You are responsible for any financial decisions you make. 

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