I have decided that the problem with many current policies is that we are trying to save what some people call the lowest common deonominator. This is a phrase that I've heard a lot recently to explain those people that need the most help. It's kind of a degrading term, don't you think? Degrading or not, I think that this may be the problem with our current government.
I'll give you and example using a subject I know best, education. According to studies, if I group my students heterogenously then I will get the best results out of my lowest students. Grouping students heterogenously means that I pair up my lowest student with my highest student. My highest student will "teach" my lowest student, and my lowest student will want to be as "good" as my highest student. I don't know where they are getting these results, but it has NEVER happened this way in my 10 years of teaching. It may work if the gap between my lowest and my highest student is not that far apart, but when you teach in an urban district, there are huge gaps in the ability between the highest and the lowest. Let me give you an example of the gap.
I have students in my 7th grade class that are at first, second, and third grade levels in reading and writing. I have some that are at fourth, fifth, and sixth. I have some that are seventh, eighth and high school. Here's what happens when you put a kid at a second grade level with another student at an eight grade level. The second grade level kid distrupts the learning process so that the student in the eighth grade level never finds out how low the second grade level student is. Or, the eighth grade level student comes to me and says that the other student "can't do it and I'm tired' gives up and gives the lower performing student the answers, or the eighth grade student fools around with second grade level student. However it plays out, the higher level student NEVER learns as much as he/she could if you put him in a group with equally leveled students. This is why higher level students that have parents that can afford it, leave the urban district schools and head to private or charter schools.
Now our comparison to the government. President Obama has the best of intentions. He wants those that can't (some would say there are those that won't in that group, but let's call them the CAN'T group) to be able to live up with those that can. If you put those that can with those that can't together and make them share their resources, those that can't will be able to get more and live a little bit better. But what actually happens is the same thing as what happens in the classroom, those that can either are brought down lower because they are helping those that can't, getting tired and giving to those that can't, or giving up and moving to a 'community' with equally leveled people. Any way you move it around, everyone is suffering.
Monday, August 16, 2010
Tuesday, August 3, 2010
Where is the outrage?
I'm not talking about the stock market after Friday's job numbers. I'm talking about the amount of money it will take to be able to take care of our elderly population. I am talking about me...and a lot of people that are in the same boat. It's going to be worse than the Titanic. We as taxpayers bailed out companies so the economy wouldn't fail, and when we are old, taxpayers will be paying to take care of us because it is almost impossible to save for a decent retirement.
I just had a conversation with my parents about retirement. Here's what will be different for me...and scary. Both my parents worked for a company that offered them a pension that includes health insurance. They receive 80 percent of their averaged last three years salary. Both get social security and they both got involved in the 401k plan when it started in the late 80's with a 5 percent company match. I don't want to make you sick, but my parents together with their social security and their pension make almost 200k/year, before tapping into their 401k. My mom is a high school graduate and my dad is a high school graduate with 20 years in the military and another 20 at the same company as my mom. They never had college loans and are considered blue collar. They worked for a company that manufactured everthing from microwaves to GPS devices. My mother was in quality control and my dad a supervisor.
I, on the other hand, went to college and continue to go to college. I have two master's degrees and am heading for a third. I still owe thousands of dollars on my NYU education. I make a little over 62k a year with my second job. According to the rules, I will receive a pension from the Massachusetts teacher's retirement system to the tune of 26k/per year at the age of 60 after 20 years of service. I will not receive health benefits or social security. I currently save $60/a week in my 403b with no match.
In other words, I will not have the retirement that my parents have. And neither will most other people. My retirement situation, according to most people, is supposed to be great. "You're a teacher...your bennies must be great!" Nooooooo, they are not, just like everyone else's, they suck. Why is our generation not outraged that we will not have the pension, social security, health benefit, and status of living that our parents have? Most of us will be at the poverty level. I am 46 years old and I never have had the ability to pay into my 403b more than the $60 per week I am putting in now. The only reason I am beginning to put more than that in my retirement is because I got a second job.
Why is it we as a society are slamming the worker that is 'hurting' our economy because of their 'overpriced' benefits? Why are we not demanding pensions? Why are we not demanding a livable wage? Why are we not demanding reasonable health benefits? Why are we not demanding a match in our retirement fund? Why are those that currently receive these benefits considered a drain on the system? Why are companies that are making billions of dollars in profits not required to provide these benefits? In the end, when we are 70, all of us will be on every entitlement program that is offered...because most of us will not be ready for retirement, and the taxpayer will be again footing the bill. But the companies will continue to make billions. Where is the outrage?
I just had a conversation with my parents about retirement. Here's what will be different for me...and scary. Both my parents worked for a company that offered them a pension that includes health insurance. They receive 80 percent of their averaged last three years salary. Both get social security and they both got involved in the 401k plan when it started in the late 80's with a 5 percent company match. I don't want to make you sick, but my parents together with their social security and their pension make almost 200k/year, before tapping into their 401k. My mom is a high school graduate and my dad is a high school graduate with 20 years in the military and another 20 at the same company as my mom. They never had college loans and are considered blue collar. They worked for a company that manufactured everthing from microwaves to GPS devices. My mother was in quality control and my dad a supervisor.
I, on the other hand, went to college and continue to go to college. I have two master's degrees and am heading for a third. I still owe thousands of dollars on my NYU education. I make a little over 62k a year with my second job. According to the rules, I will receive a pension from the Massachusetts teacher's retirement system to the tune of 26k/per year at the age of 60 after 20 years of service. I will not receive health benefits or social security. I currently save $60/a week in my 403b with no match.
In other words, I will not have the retirement that my parents have. And neither will most other people. My retirement situation, according to most people, is supposed to be great. "You're a teacher...your bennies must be great!" Nooooooo, they are not, just like everyone else's, they suck. Why is our generation not outraged that we will not have the pension, social security, health benefit, and status of living that our parents have? Most of us will be at the poverty level. I am 46 years old and I never have had the ability to pay into my 403b more than the $60 per week I am putting in now. The only reason I am beginning to put more than that in my retirement is because I got a second job.
Why is it we as a society are slamming the worker that is 'hurting' our economy because of their 'overpriced' benefits? Why are we not demanding pensions? Why are we not demanding a livable wage? Why are we not demanding reasonable health benefits? Why are we not demanding a match in our retirement fund? Why are those that currently receive these benefits considered a drain on the system? Why are companies that are making billions of dollars in profits not required to provide these benefits? In the end, when we are 70, all of us will be on every entitlement program that is offered...because most of us will not be ready for retirement, and the taxpayer will be again footing the bill. But the companies will continue to make billions. Where is the outrage?
Thursday, July 29, 2010
Emergency Fund?
I don't have an emergency fund, do you? We all know we need one but many of us don't have one. Can I call my 'mad money' stock account an emergency fund? This is the problem I have and so do soooo many others. There is an insurance survey out there that says 50 percent of us have less than one month's expenses saved for an emergency. That's what I have; one month. How do we fix it?
First you need to know how much you need in that emergency fund. I have $3k a month in expenses, more or less. Some say you need 6 months saved ($18k) and others say you need to have a year ($36k.) I'm in big trouble. I have $5k. I guess my emergency plan would be to move back in with my mother after I lose my house or get a roomate before I lose it, and use my credit cards. That's my emergency plan; keep my credit card balances low, collect returnable bottles, and get a roomate. I have no problem with that right now.
I do, and so do you, need to start building an emergency fund. If you have not started getting into the stock market, this is another thing you're supposed to do before you start. I know what you're thinking. I'm never going to get into the stock market. I know, I feel that way too. As you can see, I'm doing this all wrong. I opened my stock account last year and am now just trying to get together a realistic budget and emergency fund together. But how does someone do that? Coupons.
I am starting to only spend money on entertainment if I have a coupon. When I go to the grocery store; coupons. And all the money I save with coupons I promise I will put into a savings account. Here's how I plan to do it for August.
In August I have budgeted $300 dollars for school clothes, shoes, and items. (I am a teacher.) I have a coupon for DSW, Kohl's, Bob's Stores, and Macy's. After I'm done spending, whatever I saved with the coupons I will save.
For entertainment, if I want to go to a restaurant I will use restaurant.com and buy a half-priced gift certificate and save the money. I will use my AFT union card to buy discount movie tickets and save the money. And I will look at groupon for cheap entertainment ideas.
I am a teacher with a second job. After taxes and all the other stuff they take out of my checks I make $3k a month as a teacher and $1200 a month at my second job. I know I don't make a lot of money, but there are lots of people who make less than I do. How will they ever put enough money away to retire? Are we going to have a society that works until they drop dead?
First you need to know how much you need in that emergency fund. I have $3k a month in expenses, more or less. Some say you need 6 months saved ($18k) and others say you need to have a year ($36k.) I'm in big trouble. I have $5k. I guess my emergency plan would be to move back in with my mother after I lose my house or get a roomate before I lose it, and use my credit cards. That's my emergency plan; keep my credit card balances low, collect returnable bottles, and get a roomate. I have no problem with that right now.
I do, and so do you, need to start building an emergency fund. If you have not started getting into the stock market, this is another thing you're supposed to do before you start. I know what you're thinking. I'm never going to get into the stock market. I know, I feel that way too. As you can see, I'm doing this all wrong. I opened my stock account last year and am now just trying to get together a realistic budget and emergency fund together. But how does someone do that? Coupons.
I am starting to only spend money on entertainment if I have a coupon. When I go to the grocery store; coupons. And all the money I save with coupons I promise I will put into a savings account. Here's how I plan to do it for August.
In August I have budgeted $300 dollars for school clothes, shoes, and items. (I am a teacher.) I have a coupon for DSW, Kohl's, Bob's Stores, and Macy's. After I'm done spending, whatever I saved with the coupons I will save.
For entertainment, if I want to go to a restaurant I will use restaurant.com and buy a half-priced gift certificate and save the money. I will use my AFT union card to buy discount movie tickets and save the money. And I will look at groupon for cheap entertainment ideas.
I am a teacher with a second job. After taxes and all the other stuff they take out of my checks I make $3k a month as a teacher and $1200 a month at my second job. I know I don't make a lot of money, but there are lots of people who make less than I do. How will they ever put enough money away to retire? Are we going to have a society that works until they drop dead?
Sunday, July 25, 2010
Looking ahead
I'm always looking for the next trade, but not a daily or weekly trade. I do it quarterly. In April of 2010, I started looking at positions that would make me a profit during the summer, My catalyst was going to be July earnings. All I needed was a pullback in May and/or June. Boy, did I ever get that. It almost felt like I was magic. I finished buying all my positions that I had researched starting in April by July 3. My thinking was that traders would get out of equities by July 3 because it was a long weekend and anything can happen during the long weekend. So on July 3 I bought my last and most expensive stock position with my bulk summer (teacher) check, GS. My hope was that beginning July 7 things would start getting better as earnings came in. There were a few bumps and potholes in the road, but overall, I think most of us are doing well.
The S & P just passed a technical, whatever that means, of 1100. From what I understand about all the experts' posts is that if we can get past 1100 and make it to 1130, the bears will have to cover their shorts and a spike in the market will happen. I have no idea how anyone comes up with those numbers, but I love the internet, and I guess I don't have to know how to come up with 1100 as the magical number, I just need to know what to do when it happens. If it happens, and the earnings reports of my current positions is positive, then I'm going longer than I originally planned. The original plan was to be out by Aug 6. If we hit 1130 by 8/6 then I'm going to keep going until the 13th and keep reevaluating week to week until I need money.
At the same time I'm looking ahead to 3rd quarter earnings. Another bonus, mid-term elections. Here's what I learned about mid-term elections and the stock market; according to Marshall Nickles of Pepperdine University the first two years of a president's term is not the best time to be in the stock market, but that the last two years are very productive. And he showed charts that were simple to read. I got it. Apparently, lots of people seem to like the paper Nickles wrote in 2004 and are beginning to reference it now. So according to trend, 2009 and 2010 are supposed to suck, and by 2011 things should start getting better. Why? Because the incumbent party wants a happy voter and they usually "prop" up the stock market. I would read his paper and see for youself.
gbr.pepperdine.edu/043/stocks.html
After you're done reading, google his name and see how many times this paper is referenced. A lot and I think it will be referenced more and more as we get closer to mid term elections. But I still have questions. Should I get positioned right before the mid-term election in October (remember, it is earnings season again.) or do I wait for what some people are predicting will be the massive sell-off before the end of the year due to the rise of the capital gains tax expected to take effect 1/11? That would mean I either get positioned for earnings in October, sell off quickly, and then buy back at the bottom again at the end of December or I go to cash after this technical of 1100 is done making me money off bear shorts and wait until the end of December. As always, more research is needed and I'll let you know. But as always, I would love some educational input.
The S & P just passed a technical, whatever that means, of 1100. From what I understand about all the experts' posts is that if we can get past 1100 and make it to 1130, the bears will have to cover their shorts and a spike in the market will happen. I have no idea how anyone comes up with those numbers, but I love the internet, and I guess I don't have to know how to come up with 1100 as the magical number, I just need to know what to do when it happens. If it happens, and the earnings reports of my current positions is positive, then I'm going longer than I originally planned. The original plan was to be out by Aug 6. If we hit 1130 by 8/6 then I'm going to keep going until the 13th and keep reevaluating week to week until I need money.
At the same time I'm looking ahead to 3rd quarter earnings. Another bonus, mid-term elections. Here's what I learned about mid-term elections and the stock market; according to Marshall Nickles of Pepperdine University the first two years of a president's term is not the best time to be in the stock market, but that the last two years are very productive. And he showed charts that were simple to read. I got it. Apparently, lots of people seem to like the paper Nickles wrote in 2004 and are beginning to reference it now. So according to trend, 2009 and 2010 are supposed to suck, and by 2011 things should start getting better. Why? Because the incumbent party wants a happy voter and they usually "prop" up the stock market. I would read his paper and see for youself.
gbr.pepperdine.edu/043/stocks.html
After you're done reading, google his name and see how many times this paper is referenced. A lot and I think it will be referenced more and more as we get closer to mid term elections. But I still have questions. Should I get positioned right before the mid-term election in October (remember, it is earnings season again.) or do I wait for what some people are predicting will be the massive sell-off before the end of the year due to the rise of the capital gains tax expected to take effect 1/11? That would mean I either get positioned for earnings in October, sell off quickly, and then buy back at the bottom again at the end of December or I go to cash after this technical of 1100 is done making me money off bear shorts and wait until the end of December. As always, more research is needed and I'll let you know. But as always, I would love some educational input.
Wednesday, July 21, 2010
my budget is killing me
I put together a budget and decided I was going to stick to it for the month of July. It seemed comfortable. I was going to try it for this month and tweek as needed. Not even a week after I create it I forgot to add my car registration and inspection stuff. $285 dollars to reregister and inspect my car. Does anyone have a budget that works for them? I want to save $500 a month but it's starting to look impossible....help.
Sunday, July 18, 2010
budget busters
How much money do you spend on stuff you don't need? I know I spend a lot. I looked at my top 3 monthly money busters and they were my mortgage 1100, cable (internet, cable and phone) 160, and my cell phone 110. There is nothing that I pay more for, consistently, month after month. Where are the savings and can I live with them?
Mortgage: I can't refinance because I don't have enough equity in my home so 1100 a month it is.
Cable: This is a bundle that includes cable, internet, and phone, and it costs a bundle 160 a month. I called them and tried to lower the cost and they gave me some really cheap basic numbers on the cable side, until I realized I only watch informational programming which is an added cost. The internet is a flat fee. If I get rid of the phone it's no longer a bundle and I buy ala carte which means I'm only saving about 15 bucks. I like my home phone, I give the number out to people I don't want to have my cell phone number.
Cell phone: 110 a month. Wow!!! I can't live without my phone so I called to try and get the basics. All I really want it for it to text and use the internet on it. I told the customer service rep I wanted to drop my minutes to 200 because I don't really use it, and I wanted unlimited texting (a cheap $10 a month) but I can't go down to 200 minutes because I NEED an unlimited texting and data plan which requires 700 minutes, which I have.
So in the end, my 3 biggest money busters were going to have to stay that way unless I really wanted to disconnect from everything...No way. I'm not at that point yet.
But are you? Or do you have an alternative for me? What do people do when they try to save money on their cell and cable bundles? I could use some advice.
Mortgage: I can't refinance because I don't have enough equity in my home so 1100 a month it is.
Cable: This is a bundle that includes cable, internet, and phone, and it costs a bundle 160 a month. I called them and tried to lower the cost and they gave me some really cheap basic numbers on the cable side, until I realized I only watch informational programming which is an added cost. The internet is a flat fee. If I get rid of the phone it's no longer a bundle and I buy ala carte which means I'm only saving about 15 bucks. I like my home phone, I give the number out to people I don't want to have my cell phone number.
Cell phone: 110 a month. Wow!!! I can't live without my phone so I called to try and get the basics. All I really want it for it to text and use the internet on it. I told the customer service rep I wanted to drop my minutes to 200 because I don't really use it, and I wanted unlimited texting (a cheap $10 a month) but I can't go down to 200 minutes because I NEED an unlimited texting and data plan which requires 700 minutes, which I have.
So in the end, my 3 biggest money busters were going to have to stay that way unless I really wanted to disconnect from everything...No way. I'm not at that point yet.
But are you? Or do you have an alternative for me? What do people do when they try to save money on their cell and cable bundles? I could use some advice.
Saturday, July 17, 2010
scary numbers aka the budget
Did you figure out how much money you need to save for a comfortable retirement? That number is scary!! Mine is 2m. I need 50k a year on top of my 26k teacher pension. I figure in 2024 75k a year is a comfortable amount of money. And again I'm retiring at 60 and living to 100 (40 years retired), so 50k * 40=2m. How does a teacher save 2m dollars in 14 years? Go on a budget, save, and choose wise investments. How much do I have to save to make 2m in 14 years? 2m/14=143k a year. I don't make 143k a year, how am I expected to save 143k? This is where we need to make sure we put the little money we can save in the right place so it can grow.
Did you figure out how much money you have right now for retirement? Did you figure out how much you need to live comfortably during those retirement years? Did you figure out how much you need to save every year to make that number? That number is scary too!!
Time for a budget to see how much we can really save.
If you are on a budget, skip this part.
The best online budget resource is mint.com, but I don't use it. When I signed up it asked me for my credit card numbers and I got the willies. But if you feel comfortable, and millions do because it is rated highly, use it. Everyone I know who uses it raves about it and then tells me to get over myself. Well, I'm not at that point. If you decide to use mint.com skip the rest of this blog and go to it.
Here's what I learned about creating my own budget...you have to be realistic. The first budget I put together was so tight I couldn't do it. I am right now doing another one.
Get all your bills together. Remember this, you will not remember them all and this is where you need to practice your budget for a month or two and tweak it along the way to make sure it is realistic.
Here are the bills I thought I had:
Mortgage
heat
electricity
cable
water
cell phone
charge card #1
charge card #2
car
car insurance
gas for car
food
Where did I get this? From my online banking statement under future payments. That was easy. Nope, here's what I forgot.
delta dental
total gym
gym membership
flood insurance
car maintenance
clothing
entertainment
gifts
coffee on the way to work
banking fees
medical co-payments
time share that I bought after a bottle of champagne
time share maintenance fee
vacation
You get the drift......you will make the same mistake, which is why I say try out your budget first to make sure it is realistic. Here's what you need to do the first month while trying to figure out your budget..save 10 percent of your check. I make 1500 every two weeks. I put 150 aside....and I always spend it on something I didn't think about. I'm trying. Set yourself a date to get your budget in order. Mine is 1/1/2011. And yes, I am not listening to my own advice. I've been playing the stock market since last July, I'm still not on a realistic budget, and I don't have an emergency fund. Which I'll talk about in the next blog.
Your homework: Make a budget as realistic as you can and try to start saving 10 percent of your check. Next blog...an emergency fund. And don't think we're done with talking about the budget. We still have to discuss what we can cut back on....now that's scary!!
Did you figure out how much money you have right now for retirement? Did you figure out how much you need to live comfortably during those retirement years? Did you figure out how much you need to save every year to make that number? That number is scary too!!
Time for a budget to see how much we can really save.
If you are on a budget, skip this part.
The best online budget resource is mint.com, but I don't use it. When I signed up it asked me for my credit card numbers and I got the willies. But if you feel comfortable, and millions do because it is rated highly, use it. Everyone I know who uses it raves about it and then tells me to get over myself. Well, I'm not at that point. If you decide to use mint.com skip the rest of this blog and go to it.
Here's what I learned about creating my own budget...you have to be realistic. The first budget I put together was so tight I couldn't do it. I am right now doing another one.
Get all your bills together. Remember this, you will not remember them all and this is where you need to practice your budget for a month or two and tweak it along the way to make sure it is realistic.
Here are the bills I thought I had:
Mortgage
heat
electricity
cable
water
cell phone
charge card #1
charge card #2
car
car insurance
gas for car
food
Where did I get this? From my online banking statement under future payments. That was easy. Nope, here's what I forgot.
delta dental
total gym
gym membership
flood insurance
car maintenance
clothing
entertainment
gifts
coffee on the way to work
banking fees
medical co-payments
time share that I bought after a bottle of champagne
time share maintenance fee
vacation
You get the drift......you will make the same mistake, which is why I say try out your budget first to make sure it is realistic. Here's what you need to do the first month while trying to figure out your budget..save 10 percent of your check. I make 1500 every two weeks. I put 150 aside....and I always spend it on something I didn't think about. I'm trying. Set yourself a date to get your budget in order. Mine is 1/1/2011. And yes, I am not listening to my own advice. I've been playing the stock market since last July, I'm still not on a realistic budget, and I don't have an emergency fund. Which I'll talk about in the next blog.
Your homework: Make a budget as realistic as you can and try to start saving 10 percent of your check. Next blog...an emergency fund. And don't think we're done with talking about the budget. We still have to discuss what we can cut back on....now that's scary!!
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