The Digerati Life

Can you really double your salary without having to work more? What a premise!

I’ve never met anyone who didn’t want to get paid more for the job they were doing. I’ve heard it described time and again that the best job out there, is one that offers you the most money for the least amount of work that you need to do. If you’re delivering the goods day in and day out, I don’t see why you shouldn’t feel that you deserve just a bit more.

Conventional wisdom tells us that if we work harder, we’ll end up making more money. Although reward is certainly very often tied to more effort and more contributions, effort and reward don’t always go hand-in-hand. Just ask the guy who’s been sitting at the back cubicle for the last 5 years, pulling all those all nighters. Do you even remember his name?

Anyway, enough snark. There are things we can all do to increase our employment income without necessarily having to do any more work or having to change our job description. Some ideas are easy to implement, while others may sound a bit more radical but may float your boat anyway:

Want More Salary? Work Smarter, Not Harder

So you’d like to get paid a bit more for your time, effort and services. Well, if you use a little bit of strategy, be a little more scrupulous and do a little more planning in advance of getting a job, you may just snag a better paying position.

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The case against short term trading.

The typical learning curve for an investor begins when he or she gets their feet wet by placing some money in the stock market on a stock tip. I, along with many former colleagues, were in this boat sometime ago, before we found out that some discretionary income plus peer pressure and a sense of competitiveness over who can achieve the highest rate of return in the shortest amount of time can be a recipe for quick financial wipeouts. But we were young and silly then, so we can all just chuck it up to inexperience and youthful bravado.

These days, we know better. And most of us champion the prudent approach of taking a long term view towards investing as opposed to randomly playing the market when the urge strikes, although I do still have many buddies who like to time the market and feel more comfortable being invested for short periods at a time. My market timing buddies aren’t able to commit their portfolios to market forces without perpetually worrying about their money, and have thus felt more secure trying their luck with guessing when to enter the market and when to pull the trigger. So far, I’ve heard that the pay off from this strategy hasn’t been that exciting.

Over time, I’ve learned to gravitate towards long term investing as I gained more education and experience with investing. This is the strategy that involves building a diversified portfolio and following an asset allocation that is in tune with your risk tolerance. It involves a commitment to keeping a portfolio invested in the markets, regardless of market behavior. Like many finance enthusiasts out there, this is my preferred manner of investing, and here’s why:

Reasons To Invest For The Long Term

#1 The power of compounding is your friend.

One complaint I hear from those starting out as investors is this: it takes too long to make any money in the market. Everyone seems to want that immediate gratification and quick results. That was why the dot com era lulled so many people down the wrong path, convincing them that anything they touched was golden….on paper. Practically everything was on an uptrend, and everyone enjoyed the thrill of making quick virtual money. Unfortunately, many a portfolio did not meet with a happy ending.

If we had just all ignored how the market was behaving then, and focused on the long term, that particular boom/bust cycle wouldn’t affect us so grandly. Long term investors with their eye out into the future usually ignore current market conditions, or at least, don’t obsess over them. They may tweak their portfolios a bit, but they don’t overreact to market movements.

Our focus should be on starting an investment plan as soon as we can, and investing on a regular basis. This strategy will then allow your money to compound through the growth of reinvested earnings and a regular savings plan. You also don’t have to wait that long to see the effects of compounding: the formula, called the rule of 72, tells you how long it will take for you to double your money. Given a reasonable long term rate of return of 8%, you can expect to double your money in 9 years: 72÷8 = 9.

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I’ve been off my schedule a little bit here since I have some relatives over for a short visit. And it’s Mother’s Day, so I decided to take most of the weekend off and strayed a little from my regular routine — something I do once in a blue moon.

This week, I encountered lots of tips and hacks from all over the money blogosphere. Seems like a lot of people were in a list-making mood.

Personal Finance Reads

• The Simple Dollar: A step-by-step plan for dealing with your debt is right here: The Debtor’s Toolkit. It’s a nice package of simple financial principles to help you vanquish your debt.
• Lazy Man and Money: You know that eureka moment, when you hit upon an idea or a vision that gives you a sudden surge of energy and catapults you on top of the world? Well, I could just see this happening as I read Lazy Man’s post about this new dream he has. Now I’m dying to know what it is!
• Money Smart Life: I love this great, practical list of prudent tips for the new college graduate. I wish I had these reminders way back when!
• Gen X Finance: The weather is getting warmer so it’s time to dust off some warm weather money tips!
• The Sun’s Financial Diary: With gas prices going up up and up, here are some money saving pointers on how we can cut down on our gasoline costs.
• Mighty Bargain Hunter: How do you handle charities that call you up? I’ve turned down many because I don’t accept phone solicitations. And because I try to keep within my charitable donations budget and already support those charities whose causes I care for.
• No Credit Needed: Here’s a very telling tale about store-branded credit cards, proving that there’s some type of upsell that goes with buying stuff in department stores.
• Million Dollar Journey: This article tackles the comparison between Canadian and U.S. retirement accounts. There’s also a handy table that lays it all down.
• My Dollar Plan: Here are some helpful ideas on how to secure your financial future. It’s all in the planning!
• Brip Blap: Simplify your life with these random simplification tips. Learn to cook, don’t buy stuff, adapt to change.

Additional Readings

• The Economic Stimulus Check Means Higher Taxes To Come @ My Two Dollars
• The Checks Have Started Arriving! There Are Better Things To Spend On Than Botox Or Gambling! @ My Investing Blog
• Student Loans Aren’t Always The Enemy @ This Wasn’t In The Plan
• Dealing with the Debt Time Bomb @ Gather Little By Little
• Valuable Gift Ideas for Mother’s Day @ My Supercharged Life

Recent Carnivals

• Dressing For Interviews, Dollar Store Buys and Why Debt Stinks
• Carnival of Real Estate: Thank you to Active Rain for including my post “A Look At Real Estate: Is It Time To Buy?” as a Top 10!
• Bank Holiday Best of Me Symphony
• Carnival of Financial Planning
• Carnival of Money Stories
• Cavalcade of Risk
• Money Hacks Carnival
• Kids and Money Carnival

Think back to the time when you’d take on summer jobs or interned while you were still in school. It was fun, easy and earned you some extra bucks. So who says we can’t keep on doing this long after our teenage years are over?

I actually have a family member in an interesting dilemma. He’s a practicing lawyer from a different country and just moved here a year ago. He just took the California bar exams but while waiting for the results (which takes some months), he’s decided to take on some odd jobs to be productive and to make a bit of money. The odd jobs aren’t all that odd if it’s in line with what you’re doing — hence, he’s doing some data entry and office work at a law firm. Sure, he doesn’t need a legal license to be the office manager at a law firm — anyone with office management and computer skills can qualify — but it’s one way to get his feet through the door of the profession he’s chosen, which should work out well for him once he gets all the necessary credentials by passing his exams.

There’s really no shortage of things that you can do. If you’ve got a certain talent, or have education and experience in some form of activity that is “in demand”, there’s usually a way to get paid for it.

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The Carnival of Personal Finance #151 highlighted a prominent theme this week with an edition aptly named as “Bloggers On Surviving The Squeeze”, held at Alpha Consumer. The “belt tightening” theme continues to be the talk of the day in the money blogosphere as we grow more attuned to the nation’s growing financial challenges of late. But I also found several posts that covered a variety of topics:

• How to Dress For an Interview @ Cash Money Life
• You’re NOT Homeless! @ You Might As Well Burn $5
• Is CPI Manipulated? @ Amateur Asset Allocator

More saving scenarios were offered by The Festival of Frugality #124 which is currently running at the “mother of all frugal sites”, Frugal For Life . The layout of the carnival was simple and straightforward — it’s done in alphabetical order!

• Home Maintenance Tips @ Save and Conquer
• Top 10 Dollar Store Buys @ FIRE Finance
• How To Save By Making Credit Card Payments More Real @ The Personal Financier

Going on to debt slashing topics — we have the 138th Carnival of Debt Reduction over at Rocket Finance with a healthy dose of anti-debt articles:

• Why Debt Stinks: Life Doesn’t Just Stop So You Can Get Out @ Paid Twice
• Congress and Fed Take on Credit Card Industry @ DebtFREE-Revolution

I’d like to thank Rocket Finance for the honor of an Editor’s Pick for my article on saving money by making things last longer!

I’m not the most organized person in the world, though I’ve been working on it as best as I can. The funny thing is, I like things to be systematic and like things to be in order, but somehow, I still fall short sometimes, and I end up with a couple of missed bills and a debt collection warning.

But so far, I’ve managed to weasel my way out of any penalties or negative effects on my credit. I suppose some sweet-talking doesn’t hurt, but in all seriousness, when I do get a debt collection notice, here’s what I do:

#1 I don’t call the debt collection agency. I call the creditors directly and make my inquiries to them.

#2 To the company whom I owe money to, I let them know my bill is in collections, then I give a reasonable excuse for this unfortunate eventuality. They’re usually pretty forgiving (even with the “dog ate my payment” excuse) because they really just want to resolve the situation and get paid pronto!

#3 Then I offer to pay up immediately (over the phone, via credit card) and ask them to retract my bill from collections. No questions asked. I pay the credit card bill in full afterward.

And I’m happy to say that this has worked out well for me on those few occasions I’ve had to do this. No harm, no foul.

But the ending may not be as positive for those who are perennially late with their bill payments, or for those who’ve missed or avoided paying their bills altogether, since they’re up against a formidable force with professional debt collectors. Even those who haven’t had any trouble with their payments for some time or who may have forgotten an old debt many many years ago may sometimes find themselves getting contacted out of the blue by someone who is dead set in retrieving their money. Who knows… loans and debts can be bought and sold, so they may resurface to haunt you later.

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How tough is it getting out there these days? The general consensus is that it’s been getting economically tougher, with more reports surfacing and providing us newer metrics that prove we’re in the midst of a market decline.

And the latest proof that we’re in a slump? How about a marked increase in the sales of used goods? Apparently, more and more people are unloading their possessions, valuable or otherwise, at various second-hand markets and at a greater frequency than in the past.

And no, people aren’t selling stuff just because they want to declutter their home or have a desire to downsize. What the media is saying these days is that along with the arrival of recessionary forces and the frugality trend beginning to pick up, we’re also seeing this concerning new trend: people selling stuff to pay the bills. They’re actually selling off their goods — including their heirlooms and expensive possessions — in order to raise cash fast. I suppose that with the credit crisis coming to a head and sliding property prices preventing homeowners from using their home equity as a cash account, folks are simply running out of options.

This sounds a bit sensationalistic to me, but here are some points I culled from articles that are trumpeting a new kind of behavior among those who are trying to keep themselves financially afloat.

Selling Household Items For Cash: A Growing Movement

• Supposedly, desperation is driving people to unload their heirlooms just to pay off higher gas, medical and food expenses.
• Individuals with expensive tastes but who’ve lost their jobs are finding themselves in a bind: unloading high-priced, branded clothing like Hermes leather jackets, Versace jeans, silk shirts, handbags, and the like just to be able to pay basic grocery, utility and insurance bills.
• Collectors are unloading their highly prized collections at online auctions in order to pay for necessities. I guess it’s true: you can’t eat art.
• At Craigslist, for-sale listings are up 70% from 9 months ago and doubled from last year. Similar reports are coming from other online auctions and classified ad sites. The number of ads are much higher than normal.
• The ads submitted in online auction and “flea market” type sites are written in a more desperate tone.
• People are using online sites like they do traditional pawn shops.
• Hot items in the second-hand market are cars, clothing and furniture.
• Areas hit hard by high gas prices are seeing higher sales of vehicles in general but particularly those that are less gas efficient.
• Recreational vehicles like campers, trailers and boats are glutting the used goods market.
• Areas hit hard by the housing crisis are seeing more furniture on sale in used markets.
• Unfortunately, Goodwill and the Salvation Army have been negatively affected by the sales trends as donations are down 20% this last quarter.
• Prices of used items are going for 25% to 35% less than they did last year.

Though a lot of people have been affected due to job loss and dropping home prices, a lot of those severely affected have also been vigorous spenders in the past. From the aforementioned facts, it seems to me that a good number who are selling today are those who have a lot of extra things they can *possibly* get rid of; I wouldn’t actually consider recreational vehicles, electronic gadgets or branded merchandise as essential to living….

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Is it just me or is my financial reading list just growing longer over time? That’s cool though — the weekends are a time when I catch up a bit on what the net is saying about money. There have been a few common threads I’ve noticed in this particular edition of my roundup — including some discussion on financial infidelity, the economic stimulus rebate, and net worth updates (it’s the end of the month and everyone’s tallying up their financial numbers). And something else that never changes — more of us are having babies! Congratulations to Brip Blap on this momentous occasion. He’ll soon be waxing poetic about saving on diapers, using piggy banks and 529 savings accounts.

And before I jump into my reading list, I’d like to give a nod to Get Rich Slowly, All Financial Matters and My Money Blog for taking best marks in the May 2008 Edition of Money Magazine!

Personal Finance Reads

• The Simple Dollar: What’s your take on your kid’s education? Trent offers a comprehensive and well-rounded view of children’s education and personal finance, reminding us that education is not just the stuff taught in schools.
• Get Rich Slowly: J.D. tells us how he shifted from becoming a spender to being a saver. The turning point for him was when he got out of debt and began to realize how thrilling…and fulfilling it is to see one’s savings build and grow.
• Lazy Man and Money: Lazy Man attended Finovate, a business conference that showcased 40 financial startups ranging from Zopa to Trade King. He’s covered the whole gamut of startups and their demos in a series of posts ending with this one (it has links to the all other Finovate articles in the series).
• Money Smart Life: Are you a college graduate ready to face the “real world”? Do you know anyone who is? Going to college may be the point in time when one should think about getting their own health insurance.
• Gen X Finance: Conventional wisdom encourages us to protect ourselves financially, and to be prepared for disaster. But the question is, how much insurance should you really be getting? Should you get disability insurance? It depends on your situation.
• The Sun’s Financial Diary: I love Sun’s recaps on his net worth. Here’s yet another one showing his April 2008 scorecard, which shows a positive turnaround in his net worth trend.
• Free Money Finance: Looking to reduce college costs for yourself or your kids? Here are 10 tips to do it. For those students eyeing college, it sure helps if you load up on advance placement classes while still in high school so you can save on those credits in college.
• Five Cent Nickel: Nickel tackles the concept of financial infidelity or the act of keeping financial secrets from your spouse or partner. A survey mentioned in his article shows a surprising 48% of people involved in a serious relationship have committed such infidelity.
• Mighty Bargain Hunter: Let’s see… what else could we do with our economic stimulus rebate check? Hmmm…. how about buying a “refund-season gift card” from a retailer? Some retailers are offering additional value on their gift cards (up to 10% more) if you buy the higher valued cards — yes, a campaign made to coincide with your receipt of your rebate check.
• No Credit Needed: I just had to bookmark this awesome “No Credit Needed Debt Reduction Guide” index care of NCN. For all those who want to wipe out your stubborn debt, here’s a comprehensive set of articles to help you get on the right track!
• Million Dollar Journey: Financial infidelity seems to be a common topic in the online financial community this week. Here’s another article that ponders the relationship between financial infidelity and divorce.
• My Dollar Plan: We all have different ways of managing our financial goals and money plans. Madison walks us through her custom money plan, showing us how we can weigh the cost vs time vs priority of each of our financial goals.
• Brip Blap: Steve jokes with us about coming across a new tax deduction this week. He just celebrated the birth of his baby daughter a few days ago. Congratulations man! Good luck with no sleep.
• MSN Smart Spending and TipNut.com: Frugality and saving money is in! Thank you to Donna for featuring my post proclaiming that frugality is the hot new trend. TipNut.com also featured my humongous list of coupon usage tips!

Additional Readings

• Save Money On Gas @ Save Money
• Discover Your Investment Style In 15 Minutes @ The Shark Investor
• 15 Things To Do With Your Economic Stimulus Check @ Free From Broke
• The New Frugality @ The Mark of Ashen Wings
• Speak Up to Get A Deal @ American Consumer News
• How I Handled A Collections Letter @ The Wisdom Journal

Recent Carnivals

• Budget Busters, College Costs and Car Buying Advice
• Carnival of Money Stories #57: Thank you to Andy for picking my post on savers who died wealthy as an Editor’s Pick!
• Money Hacks Carnival #10

 
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