LIVING OFF DIVIDENDS & PASSIVE INCOME

As I mentioned 5 weeks ago when oil breached $115/barrel, demand for the black gold will cause the price to keep on rising. On Wednesday, I drove to USC where I had an interview at the Marshall School of Business for the full-time MBA program. While driving there, I heard that Oil had exceeded $133 per barrel. I had a great interview (where I spoke about my background, my interests, the state of the economy, what a moron George W. Bush is, and the current elections) and then proceeded to a friends’ place to spend the night.

I later heard that oil prices hit $135/barrel. That news was broadcast incessantly on all the news channels and I kind of felt that it was being overdone. Whenever everyones saying that the price of something is breaking all records, it usually pulls back. I think thats why the US Dollar had shown some strength this year. I woke up on Thursday and bought the ULTRASHORT OIL & GAS ETF (AMEX: DUG), it went up a dollar and I exited my position, happy to have made enough money to pay for my gasoline bill for this month.

I managed to get accepted in the UCLA Anderson School of Management. Since I applied in the third round I think thats quite an achievement. Of course, applying so late virtually guarantees no funding or fellowships. This kind of sucks since I did get a 740 on my GMAT which typically helps in getting MBA fellowships (unless you’re going to the top 5 schools). But on the other hand UCLA is ranked #12 for the full-time MBA program.

I was looking forward to not having any student loans when I graduate, especially after receiving a fellowship from UCSD. But UCLA’s program is much more highly ranked so the question is whether its worth spending the extra $60,000.

Of course, if we go through a period of hyperinflation (which I think we’re already in the beginning stages of) then in 10 years, $60,000 might only seem like $10,000! In which case, going to even the most expensive school will look like a good investment in hindsight.

Today I got a letter from the University of California, San Diego’s Business School. They’ve offered me a full fellowship for the MBA program! I think it was based on my GMAT score.

It consists of a complete waiver of all tuition and professional fees for both the years of the course. Getting this means I won’t need any student aid, nor will I have to sell any of my investments to fund my education. Considering that I have a very pessimistic outlook on the direction of the US economy, I believe the unemployment rate will be a lot higher when I graduate in 2 years time. I’d rather save up my money for the rainy days ahead (which means they’ll be more opportunity for good investments at that time). Not having to sell my investments also means I’ll be able to use the income they generate for living expenses.

I just took the GMAT (Graduate Management Admission Test) today. Its an entrance test for admission to MBA programs at business schools. I’d been studying for it for the past month and it really paid off. I scored a whopping 740 which puts in the 97th percentile and incidentally also makes me directly eligible for membership into Mensa!

I was hoping to score a 700 which would make admission into the top MBA programs seem feasible. But with a great score like this, I’m hoping it’ll become a reality. But I’m already pretty late getting my application together for next fall. The early round’s and the first round’s are over and I have less than 4 weeks for the second round of applications. After that, its incredibly difficult to get in, so my best bet is applying in the 2nd round.

Welcome to the 35th edition of the Carnival of Money Stories. This edition is pretty big with 50 entries, so pour yourself an extra-large cup of hot cocoa and sit down for some serious reading.

Debt

Reggie presents Why Money is Debt - Part 1 posted at Reggie, the black kid with good credit.

Millionaire Mommy Next Door presents What Would You Do? saying “Sleepless in Seattle” and her husband have acquired a substantial debt load and are considering whether or not to sell their home, pay off their debt and rent. They love their house, but they are tired of living on the edge financially. She asks, “what would you do?” .

Ted at Campus Grotto provides a Student Loan Consolidation FAQ saying I just recently consolidated my student loans. Here is what you need to know to ensure you don’t get scammed.
Eric at A Penny Closer laments Ahh, How I’ve Missed Consumerism…

According to this interesting article,an MBA isn’t all its cut out to be.

While having that M.B.A. might give you a boost, the reality is that the degree generally isn’t a guarantee or indicator of your future success. Business success has more to do with leadership, talent and a drive for excellence than it does with having a degree from a prestigious university. An M.B.A. can help you get your foot in the door, but according to Peter D. Crist, chairman of Crist Associates executive search firm, “it’s instinct, it’s hard work, and it’s raw intelligence” that will really help you get ahead.

It references this article in Businessweek, which is also worth checking out.

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How you think about saving, spending and investing [about money in general] affects where you end up financially. If you think wealth is limited and you’ll never make any, you’re absolutely right. If you think wealth is unlimited and you just have to figure out how to get your share, you’ll be right too!

Its a self-fulfilling prophecy where your actions follow your beliefs. Either spend time learning how to make money and eventually start making a lot of it, or you give up, figure you’ll always be poor and you never figure out how get ahead in life.

Hanging out with like-minded people also has a big affect. Do you spend most of your time with people who complain about how unfair life is, how they’re always broke and how they can never catch a break? Lose them! Their negativity will drag you down too!