About a week ago I picked up a 2005 Acura TSX. According to KBB.com, the private party value for it would have been about $24,500. The seller was leaving the country and wanted $23,500. I was able to use my awesome negotiating skills to lower the price to $21,250.

Its a pretty sweet ride. Even though its a 4 cylinder it has 200 HP and although the torque is a bit low in the low gears, it drives better than my 1999 V6 Honda Accord Coupe. The turning radius is also very tight and it corners extremely well, especially at high speed. The only problem is that it uses premium fuel. I tried mixing in regular on a half tank (reasoning that the blend of 87 and 91 would work out to mid-grade) and didn’t notice a major difference in performance. The mileage didn’t go down either.

Buying a 2 year old used car is always better than driving a new car. The first owner always has the worst depreciation in the first 2 years. If you can get a low mileage car in good condition, its almost as good as a new car anyway. You pay a lot less for it and if you keep it for 6 years before you sell, you shouldn’t experience major repair costs either.

My ’99 Accord (which I must confess I bought new) should last me another 2-3 years easily. I has about 100,000 miles on it and I haven’t had any major repairs. Just tires, brakes and regular maintenance.

Money & Such has a good post on Negotiating a Job Offer.

I tried telling my wife that she should always counter the job offer, regardless if she’s fresh out of college and that every one of her friends got identical job offers.

She refused saying that her professors were against it and that it would look bad and create the wrong impression about her. Long story short she later found out that some of her classmates, while getting the same salary, did however get an extra thousand bucks as a sign-on bonus!

She was really pissed. It wasn’t the fact that it was a thousand dollars, but rather the fact that a salary is a measure of her self-worth. She graduated with a summa cum laude and she really felt short-changed.

Nothing is ever set in stone. If a salary is the most they can give, they’ll tell you so. Just don’t be a jerk about it and you won’t have the offer rescinded on you!

Rich at Queercents has a good post on what it takes to be middle class and makes a great case on why being middle class (at a $75k annual income) means barely getting by.

Sadly, I agree with the post. Ever since the 1960s, where a single earner in the family could provide for a family and send the kids to college, the average american’s standard of living has been eroding at a steady pace. Of course the average house is 30% bigger than a 60s house but apart from the bump in creature comforts, there has been a drastic decrease in the amount of savings.

It now takes 2 incomes to maintain a decent lifestyle, and again, most people barely get by. There’s the choice people have to make – do I want to save for my retirement this year, or go on vacation? And with the government lying about the rate of inflation, Social Security payments (or bank savings rates) haven’t been keeping up. As a result, many seniors who thought the government would take care of them have an even more difficult choice – should we buy food or medicine?

In California, where the median house price is $550k (and dropping), being middle-class is even more difficult. I have friends, where both spouses work. One of their incomes goes totally towards house payments! So far I’ve turned down my wife’s complaints about moving into a bigger house on the grounds that we can’t afford it. I’d rather make the extra payments into areas where the house prices are appreciating and the rent covers most of the mortgage. Its better to have 5 appreciating assets you can afford than 1 depreciating “asset” that you can’t. (isn’t that really a liability?) Of course, the popular press will make stupid comments like “your house is your biggest asset” instead of saying, “if your house is your biggest asset, it just means you don’t really have any assets and are probably broke”. (that deserves a separate rant of it own!)

Just goes to show that no one will take care of you. Its up to you to make your own financial future, to learn about finances and investing, to make the right and smart decisions, to live below your means, and to develop alternate means of income. And thats Kiyosaki’s philosophy in a nutshell! Now you don’t have to read the book 😉

I spend a several hours every week reading different newsletters on a variety of investment, business and marketing topics. Here’s an interesting piece on the value of branding.

If what people feel and remember about your business is positive and translates into more loyalty and sales, you’ve just made your business more valuable. Here is an example which opened my eyes even wider to the importance of branding.

On a news television show I watched recently, a test was performed on children and their breakfast choices. The first test involved placing a banana and a cupcake in front of the child and asking which they preferred to eat. In the test, they placed stickers of popular cartoon characters such as “Shrek” and “Spongebob” on the banana and left the cupcake plain. Almost all the kids chose the banana for what they would prefer to eat for breakfast.

In a second test, they placed a rock (yes, I said rock) with stickers on it and a plain banana in front of the child. Almost all of the children said they would prefer to eat the rock for breakfast!

How many of you subconciously buy stuff solely based on the branding? Clothes, food products, electronics and maybe even investments are made on our perceived value of the item and not on its actual merits or even our needs.

Why is my wife willing to spend more for jackets just because they have a tag on the inside which says its from some high-end clothing store? Or for sweatpants which have sparkly BCGC studs across the rear?

Today I changed the funds selection in my previous employer’s 401k. I was investing about 30% in Global funds, 15% in financial funds, 30% in world wide health, 10% tech, and the remaining 15% in small, mid and large cap funds. I moved the 15% in financial over to global funds.

In my current job, where I’ve boosted the 401k through a high contribution[currently 30% of income which I’ll change from the 1st of Jan] I changed it to 60% global and international funds, 10% value income funds and the rest a mix of small, mid & large-cap funds.

Its not that I don’t have much faith in the US economy[which I don’t], but rather that I feel even if foreign stocks will do slightly better. I do feel that the US dollar will drop another 20-30% over the next few years which will boost the returns on global funds.

If I had to choose US companies, I’d stick to multi-nationals like Unilever, P&G and Walmart which have a large amount of foreign income and pay out dividends. Can’t see myself investing in stocks that don’t pay out dividends. I tried that once in 2000 and lost my shirt!

USA Today has a good story about a young 29 year old with $165,000 of student loans.

She got a degree in Chiropractic health and makes $44,000 a year. Not surprizingly she can’t afford to eat out or feel she’s making any headway reducing her debt. She also isn’t saving for retirement nor does she have health insurance. She does however feel saving for her future kids education is important.

Hmmm….don’t you think you’d try and see if getting $165,000 in debt was worth it if you could only get a $44,000 job? Assuming a she pays 5% interest on her student loans and ignoring her other credit card debt and car loans, she’d pay about $687/mo interest on her student loan. Her monthly pre-tax income is $3700 so she pays a whopping 18.5% of her income towards the interest on her student loan!

Why would someone pay more than 1 times the potential annual salary is amazing. I have a friend who’s going to Harvard Business School. Luckily she has a business and the contacts she’s made in her first semester should more than pay for the education. But even if that hadn’t been the case, spending $150,000 atleast makes financial sense since many HBS grads make that in the first year.

Kind of like the kids who go to Ivy league schools to get philosophy and liberal arts degrees and then wind up with $120,000 student loans and $26,000 jobs!!! Its ok if your daddy is rich and can afford to send you there. But if you’re going to be paying off the loan yourself, you better make sure it doesn’t take you 30 years.

Jeanne Sahadi has a good article on CNN Money. Titled “Secrets Your Company Doesn’t Want You To Know”, its discloses some of the misconceptions surrounding how your actions at work affect you. Here’s a snippet.

The typical rationale for layoffs is the need to reorganize and cut costs.

Pish-posh.

Sometimes those reasons are genuine. But Shapiro has seen companies push select employees out of their jobs or layoff an entire department just to get rid of one or two people without incurring liability.

And those select employees may never know they made a manager’s blacklist.

One easy way to get on it is to insult the boss or be overly negative about the company on email, in a meeting, or at the water cooler.

Being a top performer may provide some protection. But if you and your boss don’t get along and he has to get rid of two people, he’s likely to go for the people who make his day difficult, Shapiro said.

Being among the most highly compensated employees in your office will only give him added incentive.

Treat difficult bosses and colleagues as you would if you were a small business owner dealing with annoying clients: professionally at all times, she said. Otherwise, you’ll lose the account.

You’re also at greater risk of a layoff if you’ve:

• First announced that you’re pregnant or need medical leave to someone other than your boss. If she hears about it from someone other than you, she could lay you off and claim she had no idea about your personal situation.

• Taken a medical leave or filed for worker’s compensation recently.

• Filed a complaint against the company or your boss.

Ok, so this isn’t really an article on how to get fired. Maybe I’ll work on that some other day. In the meantime you can read the rest of the article here