The Seven Biggest Used Car Buying Pitfalls (and How to Avoid Them!)

(This is a guest article by Paige Green*)

Whether it’s your first car or you’re tenth, we are all prone to some rather basic mistakes when it comes to making the decision to buy. After all, a car is emotive and appeals to some basic primal need we seem to have for things that are shiny and go very fast. (Historically, our great great grandparents were probably suckers for a speedy horse with a well groomed coat). Unfortunately for our ancestors, they probably didn’t have the same access to information that we currently do, so there was nothing they could do if their prize pony turned out to be a training nightmare. Learn how you can avoid the pitfalls of car financing and purchase by arming yourself with information.

Seven Ways NOT to buy a Car

Falling in Love and getting blindsided

Your perfect vehicle, it looks great, drives like dream and you’ll be the envy of all your peers – if you have your heart set on the car of your dreams – STOP! This is one of the most obvious traps of car buying, especially if you’ve spotted the love of your life in a dealership parking lot. Becoming blindsided and committed to a particular vehicle without first determining the implications of the purchase can mean you’ll be drowning in heavy debt or be bound to particularly unfavourable terms.

Not doing your Research

The decision to buy a car is not a light one and before you step into a dealership or start considering internet auctions, you need to do your research and find out what sort of vehicle will suit your needs. Consider your lifestyle requirements as well as your budget and financing options. Don’t forget to account for the future, if you’re not sure what your situation will be like in five years, you might not want to commit to a vehicle that’ll lock you into a particular style of living for the long term.

Buying and Borrowing out of your Budget

If you’re looking at financing options, it’s tempting to borrow up and “get something you really want”. Remember that defaulting on your monthly payments will seriously affect your credit standing and will have a substantial impact on any future financing. Remember to also consider depreciation costs and other factors that will affect the final value of your vehicle and your assets.

Not looking into finance

When you walk into the lot, the dealer usually offers you instant dealer finance to help you with your purchase which always seems tempting since there’s no lengthy and nervous waiting time that comes with bank loans or the unsettling and embarrassing possibility of rejection. The problem is that without doing your research and considering all of your car financing options, you can end up paying exorbitant fees and higher rates in the long run.

Not test driving

As internet auctions become more prominent, it’s sometimes too easy to just purchase a vehicle based on the owner’s description and not actually doing an in person inspection, especially if the seller is out of state etc. It’s hard to get the information you really need to ensure that a car’s performance measures up to the promised description.

Not Doing a Thorough Inspection

Do your own check for oil (you want to make sure it’s clear and not dirty) and look for any signs of water damage as this could lead to expensive problems in the future even if the vehicle is running great now. When buying a used car, it’s best to consider getting the vehicle inspected by a professional mechanic. For a few extra bucks, it’s worth it to hire a mobile inspector to visit the site and do a quick on the spot check to make sure the car is in good working order. Alternatively, bring along a friend who knows about vehicles.

Not Getting a History Check

By running the Vehicle Identification Number (located on the driver’s side dash or in the door jamb) through vehicle check, you can obtain the full history of your car and find out if it’s been in any accidents or has any outstanding debt attached to it. Don’t take a seller on his or her word, but arm yourself with the necessary information to be a wary buyer.

*About the author: Paige Green hails from the Land Down Under and is an expert at driving on the left side of the road. She waits eagerly for Lemon Laws to be introduced there and also writes for Australia’s leading experts in car finance.


*Image Credit: Photograph by Jeremy Brooks [via Flickr Creative Commons]

Chasing Money - Is There Ever An End To It?

I chatted with an old friend today after a long time. And while we were talking about our jobs and how our companies fared, he told me that they had recently got a new CEO. And as a matter of conversation, he mentioned that the new CEO was going to be paid something along the lines of 30+ Million dollars in stocks (restricted units, not options!), in addition to 1.2 Million dollars in annual salary and 2.4 Million dollars in annual bonus, to take the job. The numbers were just mind boggling. And this new CEO guy is just 45 years old!!! As most conversations with old friends go, we were all over the place, and before we knew it we were debating about whether we would even want to be in the shoes of this guy.

On the one hand, being just 45 and being offered so much money to take on a job seems like an incredible accomplishment. Especially for a guy who was just like us - with a Ph.D. degree and not a fancy schmancy M.B.A degree or someone who wasn't exactly born with a silver spoon in his mouth. How cool is a life with millions of dollars to throw around!!! On the other hand, how much life would this guy have had? He must have worked his butt off to get where he did right? Sure, luck and timing and being at the right place at the right time had something to do with it.... but unless he burnt a lot of midnight oil and stressed out enough to turn several hair gray, I doubt he could have got where he is today. When you are busy building such a high profile career, where is the time for the simpler things in life? To smell the roses, to attend your children's plays and recitals, to cook a meal with your spouse and enjoy it on the back porch? What good is several million dollars, if you don't have time to enjoy spending it? We consoled ourselves that our average Joe jobs that paid decent salaries while allowing us time with our families was good enough.

After I hung up the call though, I couldn't stop thinking about this. Are we really that different from this CEO guy, other than the fact that we don't make a multi-million dollar salary per year (that's a big glaring difference, but lets ignore that for a second, shall we?). Let me take my example. I am currently *very* pregnant but I still continue to go to work, so I can save all my PTO for the time after the baby comes. Even with all this saved vacation and the short term disability pay, I will have only about 9 weeks of time off with my new baby. And then I need to make a choice - either go on unpaid leave or return to work. And I am not very open to the idea of going on unpaid leave for long periods of time :(

Now, do we *need* the pay I will get by foregoing those few weeks of unpaid leave? Well, not really. The better half makes a decent salary, and we have some money in both short and long-term savings and we can survive fine without my paycheck for several weeks, months or maybe even years. So, why am I so reluctant to forego a few weeks of salary? Ultimately, are we all addicted to money so much, that we cannot stop chasing it? Do we all just trade in our time blindly in the pursuit of money? In some cases like that of the CEO guy its millions, and in other cases like me it is a few thousands but is it the same thing? Do we all intentionally (or out of habit) just chase financial security at the cost of quality family time?

I don't think I am cut out to be a stay at home mom. I admire those that have made the brave decision to give up their careers to raise families. But a large majority of my friends and the people I know are like me - they have reluctantly got back to work after having babies. They spend the days from morning to late night switching roles - an ideal employee to an ideal mom to an ideal spouse. Trying to advance the career and bring in a bigger paycheck, while at the same time trying to be a good mother and wife and provide a good nurturing family. Balancing, juggling, being super women....

What is it that fuels this insane desire to chase money? Is there ever an end to it? Do any of you ever wonder, or is it just my pregnancy hormones talking? :)

*Image Credit: Photograph by David M* [via Flickr Creative Commons]

PS:This article was featured as an Editor's Picks in the Carnival of Personal Finance #165 over at No Debt Plan. Head on over there for some really good reading...

Guide to Hiring Women!

I received an email from a friend with this “Guide to Hiring Women” supposedly published in the July 1943 issue of Transportation Magazine. Apparently, it was written for male supervisors of women in the work force during World War II. I couldn’t quite believe it and decided to dig a little further. Looks like it is not just spam or a hoax after all! Snopes.com claims to have verified the legitimacy of the article and has images of the original print version on their site! All I have to say is, Thank God, I wasn’t looking for a job in the 40’s!

Eleven Tips on Getting More Efficiency Out of Women Employees

There's no longer any question whether transit companies should hire women for jobs formerly held by men. The draft and manpower shortage has settled that point. The important things now are to select the most efficient women available and how to use them to the best advantage. Here are eleven helpful tips on the subject from Western Properties:

1. Pick young married women. They usually have more of a sense of responsibility than their unmarried sisters, they're less likely to be flirtatious, they need the work or they wouldn't be doing it, they still have the pep and interest to work hard and to deal with the public efficiently.


2. When you have to use older women, try to get ones who have worked outside the home at some time in their lives. Older women who have never contacted the public have a hard time adapting themselves and are inclined to be cantankerous and fussy. It's always well to impress upon older women the importance of friendliness and courtesy.


3. General experience indicates that "husky" girls - those who are just a little on the heavy side - are more even tempered and efficient than their underweight sisters.


4. Retain a physician to give each woman you hire a special physical examination - one covering female conditions. This step not only protects the property against the possibilities of lawsuit, but reveals whether the employee-to-be has any female weaknesses which would make her mentally or physically unfit for the job.


5. Stress at the outset the importance of time the fact that a minute or two lost here and there makes serious inroads on schedules. Until this point is gotten across, service is likely to be slowed up.


6. Give the female employee a definite day-long schedule of duties so that they'll keep busy without bothering the management for instructions every few minutes. Numerous properties say that women make excellent workers when they have their jobs cut out for them, but that they lack initiative in finding work themselves.


7. Whenever possible, let the inside employee change from one job to another at some time during the day. Women are inclined to be less nervous and happier with change.


8. Give every girl an adequate number of rest periods during the day. You have to make some allowances for feminine psychology. A girl has more confidence and is more efficient if she can keep her hair tidied, apply fresh lipstick and wash her hands several times a day.


9. Be tactful when issuing instructions or in making criticisms. Women are often sensitive; they can't shrug off harsh words the way men do. Never ridicule a woman - it breaks her spirit and cuts off her efficiency.


10. Be reasonably considerate about using strong language around women. Even though a girl's husband or father may swear vociferously, she'll grow to dislike a place of business where she hears too much of this.


11. Get enough size variety in operator's uniforms so that each girl can have a proper fit. This point can't be stressed too much in keeping women happy.

What the @$^% ?!!??!!!

Medical Tourism: An Option for Keeping the Cost of Uninsured Medical Bills Down

Some day, if I ever get comfortable talking about it, I will write in detail about the reason for this post. For now though, let me just put some information out there for those of you who are fighting with medical conditions that are either not sufficiently covered through insurance or the wait time at your local medical facility is far too long.

What is medical tourism?
Simply put, it is a combination of tourism and medical treatment. In earlier days, people from developing countries (who could afford it) would travel to developed countries seeking state-of-the-art medical treatment. However, in more recent years, due to the increase in health care costs and the long wait for some specialized procedures in developed countries combined with the availability of sophisticated medical treatment in developing countries, the trend seems to have reversed. People now go from countries like USA, Canada, Japan, UK etc, to developing countries like India, Thailand, Singapore, Hong Kong, Columbia etc. where same level of medical attention can be obtained for a fraction of the cost. According to this article medical tourism is poised to be a multi-billion dollar industry and studies estimate that medical tourism could bring between $1 billion and $2 billion USD into India alone by 2012.

What are the medical conditions for which one may opt for medical tourism?
In general, medical tourism is an option to consider for elective procedures which may not be covered by insurance or requires a long wait in the native country. Examples include cardiac surgery, joint replacement, dental procedures, plastic/cosmetic surgery, infertility treatment, lasik eye surgery etc. In addition, medical tourism has attracted patients seeking alternative medicines when modern science fails and for recuperative medical spas.

Which countries offer medical tourism options?
Here is a map that was originally published in this article that shows the different countries that offer medical tourism options.


What are the advantages of seeking medical help abroad?
The first and foremost is of course the significantly reduced cost of treatment. According to Wikipedia, - "A heart-valve replacement that would cost US$200,000 or more in the U.S., for example, goes for $10,000 in the Philippines and India—and that includes round-trip airfare and a brief vacation package." Treatment for other medical conditions can also cost anywhere from 1/3rd to 1/10th the cost in US, UK or Canada offering significant savings.

In addition, many of the facilities in developed countries have long wait periods for surgeries that may not be life-threatening. Countries that cater to medical tourism offer patients quick treatment options thus helping prevent long painful waiting periods for treatment.

For those that like the exotic, medical tourism offers packaged travel deals with luxury accommodation and special attention while still keeping the cost less than that of just the surgery in the home country.

Contrary to common stereotype image of the developing countries, the facilities that offer medical tourism provide quality state-of-the-art medical treatment by professionals trained in the best medical facilities around the world and are leaders in their field.

What are the things to be aware of while considering medical help abroad?
One of the biggest concerns with medical tourism is that the countries that offer medical tourism may not have stringent malpractice laws as the US, UK or Canada. That means that if something were to go wrong, there will be little option for recourse.

Since you will likely return back to the home country within a few days/weeks after the medical procedure, there is very little scope for follow-up care and the patients must look to the local facilities in the native country if any post-procedure follow-up is required.

In some cases where the treatment stretches for months, it may be required to stay in the foreign country for long. While this may be viable financially, attention must be paid to emotional and psychological comfort of the person going through the difficult times in a foreign land.

Finally, there is the ethical question that many of the facilities ignore the local patients in their eagerness to please the patients from developed countries with fatter wallets.

Where can I find more information?
A simple Google search for the term “medical tourism” yields a lot of information. Here are some of resources I found helpful

• Wikipedia


• CBC News article


• Time.com article


• Medical Tourism 101, A complete Guide


• Medical tourism accreditation information


• JCI accredited organizations


• Article about nonprofit medical tourism accreditation service


• Medical tourism discussion forum

Get Rid of Unwanted Mail. It's Bad for your Wallet and Bad for the Environment

(This article is a part of the Blog Action Day that brings together 14,000+ bloggers from different walks of life in a global effort to increase awareness about environmental issues.)

In an earlier life, I would open every piece of mail I received in my mail box to look for coupons. And if I found a coupon that I liked I would be off shopping. I mean, what’s not to like about 20% discount at Bed, Bath & Beyond, right? Well, here’s what – I did not really need anything from Bed, Bath and Beyond! I was essentially being conned into spending for the purchase of an item that I didn't particularly care for. That is just one of the evil ways that junk mail can harm your wallet. And the evil it wreaks on the environment is so much worse!

How Unwanted Mail Costs you Money!

• They are a source of temptation to spend money.

Marketing people have spent years and years learning the human psychology to figure out how they can con consumers into buying more stuff. As mentioned above, it may be a coupon or a discount or a check for some money if you start a service etc. Or it may be catalogs with pretty pictures that instill a yearning to go buy stuff. Overall, the unwanted mail instigates a desire to buy stuff that you otherwise don’t need or think of.


• They add clutter and clutter can cost money.

If you do not immediately sort out the necessary mail from junk mail and throw away the junk mail, you will soon find your house/apartment cluttered with paper. Some important mail can easily be lost in this clutter resulting in late payments (and some hefty fees) or lost opportunities.


• Your tax dollars are spent to get rid of the junk mail you throw away.

According to the Stopjunk website, it costs 320 million of tax dollars for disposing off the unwanted mail! That’s money not spent to improve our schools, public transportation, roads and other really worthy causes. And that’s our money that is getting wasted!


• You spend precious time to sort through them and time is money.

According to the New American Dream website, Americans throw away 44% of bulk mail unopened, yet still spend 8 months per lifetime opening bulk mail. OK, those statistics could be quite hoakey and not all of our time may be spent in productive money-earning tasks, but do your really want to spend that time in sorting through junk mail or would you rather be spending it with your kids or watching TV or reading books etc?

How Unwanted Mail Hurts the Environment

• Unwanted mail = wasted paper = cutting trees unnecessarily.

According to the New American Dream website, more than 100 million trees’ worth of bulk mail arrive in American mail boxes each year – that’s the equivalent of deforesting the entire Rocky Mountain National Park every four months. According to this newsletter article an average American family receives more than a tree’s worth of junk mail every year! Each of us who has not got rid of unwanted mail is directly contributing to deforestation.


• The Energy cost of producing and disposing junk mail is exorbitant.

Not only is unwanted mail causing a lot of trees to be cut, it is wasting a lot of resources as well. If Americans receive several million tons of unwanted mail, imagine the energy used up in printing these material. And the fuel consumed to transport these to your door step. And the chemicals spent and the green house gasses generated in the process! According to the fact sheet on the New American Dream website, the production and disposal of direct mail consumes more energy than 3 million cars! That is just not worth it!


• Not all junk mail can be recycled!

Some smart dumbass marketing manager some place decided that glossy paper will entice more people into buying their product and convinced the powers that be to finance a marketing campaign that only uses glossy paper. As if that were not bad enough, they decided to use colorful ads and probably staples too. The result is that I end up with a fantastic looking catalog that I am not interested in, but cannot recycle!


• Not everyone recycles their junk mail.

Even if the junk mail was recyclable, not everyone makes the effort to recycle the junk mail. It is sad to see millions of tons of paper go directly from mailbox to trashcan to landfills after having consumed so many of environmental resources!


• Unwanted junk mail fill up landfills.

The unwanted mail that is not recycled or cannot be recycled ends up in landfills. According to the statistics on this website 40% of the solid mass that makes up our landfills is paper and paperboard waste. By the year 2010, it is predicted to make up about 48%. While not all of this may be due to unwanted mail, considering that about 40 pounds of junk mail is sent to every adult each year and approximately 44% goes to a landfill unopened, I would think junk mail makes up for a large percentage of the paper that gets into land fills.

What you can do about it.
It’s simple. If every household makes an effort to minimize the junk mail they receive, together we can stop this monster that wreaks havoc on our money and the environment.

• Opt Out of Prescreened Credit Card Offers

A joint venture of the three credit bureaus helps stop prescreened credit card and insurance solicitations from landing in your mail box. You can opt out by calling the toll free number 1-888-5-OPTOUT or online through the website www.optoutprescreen.com.


• Register for the Direct Marketing Association’s “Do not mail” list.

While there is no law at this time that requires companies to not mail you because you have registered with the “Do not mail” list, most companies recognize that if you have gone so far to add your name to the list you will likely just throw away any offers they send you. So in the interest of saving money and guarding their reputation, many companies who are part of the DMA stop sending you offers. There is a charge of $1 for this service though and the response is slow since the main database is not updated on a continuous ongoing basis. You can register online using this form.


• Turn down local coupons and fliers.

According to postal regulations, all fliers must be accompanied by an address card or an address label. This may be in the form of a post card with a missing child’s photograph or a label on one of the fliers and will likely be addressed to the “current resident” or “occupant”. This card/label will have information that will help you identify the company that is mailing out the fliers. Look online or in yellow pages and call the company directly to have your address taken off the list. Here is the contact information for three of the major flier/coupon/catalog mailing companies –

• ADVO, Inc.: Call up (888) 241-6760 or use this online form.


• Val-Pak Coupons : Call up (888) 797-1896 or use this online form.


• Abacus, Inc. : By e-mail: optout@abacus-us.com with “remove” in the subject line and name and address in the mail.



• Cancel catalogs from individual stores.

When you receive catalogs in mail, look for a customer service number and call up right away before you forget and ask them to stop sending you any more catalogs.


• Opt for E-bills and electronic statements.

Every time I receive my credit card bill or a bank statement, I find that the envelope is stuffed with a bunch of fliers and offers. This junk can be reduced by opting for e-bills and e-statements. But it may not work for everyone. If you are like us and paranoid that you might forget to send a payment without the regular paper mail reminderrs, then you may not want to go for this option.


• Unsubscribe from unwanted magazines.

Magazines are one of the biggest leaks in most people’s budgets. If you have a credit card that gets automatically charged every year, then you may not even realize that your subscription has been renewed. The magazines that you liked last year may not appeal to you now and may end up in a pile on your coffee table without ever being read. Please call the unread magazine companies and cancel your subscriptions. This way you can not only plug the money leak, you can save the environment too.


• Mention explicitly that you do not want information sold.

When you sign up for any new service or subscription, clearly write the following next to your address – “Please do not sell, trade or make publicly available”. It may or may not help, but hey, no harm trying!



• And finally, if some unwanted mail sneaks into your mail box recycle it.

Recycling is catching on in most big cities in the US. Here in Texas, there is a scheduled recycle pick up that is aligned with regular trash pick up, in most cities. Also, many apartment communities offer specially marked trash cans for recyclable items. Actually, at our previous apartment there was a recycle bin right next to the mail boxes so we could dump the unwanted mails as soon as we picked them up and have them recycled. I am not sure how widespread the effort to recycle is, but do your part. If in spite of all the steps above you continue to receive unwanted mails, try to dispose them off in a responsible manner.

More resources for learning about junk mail
If you have more questions and are looking for more information, check out these resources for more information.

• New American Dream website.


• Frugal Green News Letter.


• Smart Money Article.


• Ecocycle article.


• Privacy Rights Fact Sheet.

If each one of us does our part, we can make sure that our environmental footprint is kept small and our future generations can continue to enjoy this planet as much as we do. And saving some money in the process is a nice bonus :)

*Image Credit: Photograph by sparkyourart [via Flickr]

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Whoa, Pets are Expensive!

Here is something I overheard during lunch yesterday. I know eves dropping isn’t exactly good manners, but in my defense, these ladies were talking very loudly, and I was sitting all by myself with nothing to do, waiting for my friend to join me.

---

Lady 1: “My mom gave Vic (son?) a dog for his birthday, and its killing me!”

Lady 2: “Um… hmmm….”

Lady 1: “My apartment charges $500 pet deposit. In addition to that I spend $12 a day on doggy day care since both Tom (husband?) and I work. And today I got a call from the day care that Timmy (the dog?) had swallowed something and was coughing and dry heaving. So they took him to the vet. The vet charges $43.99 for inspecting the dog. But since Timmy was very agitated and snapping at them, they wanted to sedate him first. That would cost an additional $100. And if he has indeed swallowed something then it would cost an additional $159.99 to retrieve it. It’s crazy. I asked Tom to handle it.”

Lady 2: “You can’t be serious! That’s over $300 just because your stupid dog swallowed something? You need to get rid of that dog!”

Lady 1: “I don’t know. Vic is so attached to him. And Timmy is really very sweet and affectionate…”

---

At that point my friend arrived and I had to leave to get my lunch. But boy, was I shocked! That’s a lot of money they were talking about. When we moved into our own house, one of the first few things I wanted to get was a dog. I pestered my husband about it (and still give him a hard time sometimes), but he managed to talk me out of it saying its too much work and the dog will be “depressed” if there is no body at home all day. (I think the thought of having to pick the doggy doo was what really persuaded me though – but that’s a different conversation). After listening to the ladies today however, I am glad we didn’t get a dog!

When I came home I remembered that conversation and thought I would just check online if it really cost that much. I came across this site which has the national average vet costs. Reading this, it seems like the lady in the restaurant was actually getting away cheap :) Here are some of the costs from that site –

Gastrotomy (to retrieve swallowed object): $274
X-rays: $58 for the first, $36 for each additional
Anesthesia (per half hour): $56
Preanesthetic sedation: $23
Preanesthetic exam: $28
Anesthetic monitoring: $19

I have no idea what Preanesthetic sedation is or why it would even be needed, but boy, those costs are quite staggering. I browsed a little more and found several articles that talk about similar high costs. Wow, that’s something.

I really love dogs and would love to have one, but seriously, I doubt if I can afford one at this cost!

If you are thinking of getting a pet, be sure to think of the financial aspects among other things and make an informed decision!

If you already have a dog and love it, here are some articles that might help you keep the costs down. I understand that once you get attached to a pet, and it becomes a part of the family, you will not want to “get rid of it” or be too stingy with medical expenses. We had dogs in our house all through my childhood and I cannot imagine giving away the dogs that we had come to love because they cost too much. But I hope, some of these articles will help you find a way to keep the costs down and manage the expenses as efficiently as possible!

• 57 Creative Ideas to Save Money As a Pet Owner at the Frugal Panda.


• Outrageous Vet Bills at the Dollar Stretcher.


• Put Fido on a Budget: How to Save Money on Pet Care at Googo bits.


• 13 ways to save big on pet care at MSN Money.

Putting My Money Where My Mouth Is

If you are a regular visitor to this blog, then you have probably heard me complain that schools don’t do nearly enough to teach kids the value of money. Well, last week an opportunity to do something about it presented itself in the form of an email from HC, the author of the blog One Big Mortar Board. HC proposed that we PF Bloggers participate in the Blogger Challenge by the charitable organization Donors Choose that hooks up donors with public school teachers. HC picked four projects that are focused on spreading financial literacy among young kids. Now it is our turn to make it a success.

The goal is to raise $1500. If we are successful at this, we can aim for a stretch goal of $2400. That covers the four projects that were originally suggested by HC. There are four more projects in the pipeline, if we manage to exceed the stretch goal as well. I sure hope we will !

I made my contribution yesterday. I hope some of you readers will consider participating in the challenge as well. Even $1, $5 or $10 can go a long way in making this campaign a success. If the projects from this challenge can change the financial perspective of even a few students, then the money donated is money well spent!

Here are the other bloggers (that I know of) who have made a pledge so far -

• HC @ One Big Mortar Board.


• Flexo @ Consumerism Commentary.


• Mapgirl @ Mapgirl's Fiscal Challenge.


• Single Ma @ Single Ma's Fabulous Financials.


• English Major @ An English Major's Money.

Together, we can make a difference!

Blackwater Incident: A (Spineless) Taxpayer’s Rant

This is not a political blog. And I am not trying to make a political statement. But the Blackwater incident in Iraq from last weekend just doesn’t sit well with me. So, here is my rant. Do with it what you wish.

Here is what bothers me – Blackwater employees who are just regular citizens of America like you and me, shot and killed the citizens of another sovereign country Iraq, on their own soil. Now, since Blackwater is not part of the military, those responsible cannot be court martialled under the Uniform Code of Military Justice. Since they are not on US soil, the US laws do not apply to them. They cannot be tried by the Iraqi legal system due to the provisions of the Coalition Provisional Authority Order 17 in 2004. [source1, source2] And who paid for this mercenary operation that is above and beyond the reach of any law? You and me – the clueless, hapless, (spineless) taxpayers!

Blackwater was founded in 1997 by an ex Navy Seal with a keen entrepreneurial bent of mind. As a for-profit private organization that trains and provides security to diplomats, Blackwater has supposedly increased its profit by over 300% during the past few years. Finding its profit statements on the Internet is not very easy, but according to the wikipedia entry, during the past few years, Blackwater has received over 500 million dollars in government contracts (many of them being no-bid contracts)! While I was reading about Blackwater and its founder and trying to wrap my brain around the number of zeros in the financial figures involved, I couldn't help but visualize the smug face of Nicholas Cage from the movie Lord of War.

Frankly, I don’t know whether companies like Blackwater do a great service to the country (as their website claims) or they are mercenaries without a conscience. In the words of U.S. ambassador to Iraq, Ryan Crocker [told to the U.S. Senate]: "There is simply no way at all that the State Department's Bureau of Diplomatic Security could ever have enough full-time personnel to staff the security function in Iraq. There is no alternative except through contracts." [source]. The Blackwater employees do put their lives in harms way every single day and have suffered the chilling consequences more than once [Fallujah Ambush, Other Incidents]. In matters of war and conflict, the facts are so hazy and every story has so many sides that it becomes hard to make any judgment. That said I wish my hard earned money did not go into funding hazy operations flirting with the boundary between good an evil. I work hard for every penny and wish my tax dollars would go into projects where the benefits are clearly observable like improving the schools or the health care system or the public transport system.

I know I ought to be more involved and more active in the political decision making process, and yet I am not. I know I ought to question and hold the politicians who use my tax contributions accountable for their action and yet I don’t. I live my comfortable suburban life with my cushy job socializing with my equally clueless friends. Until the day the war is brought home by someone who straps on a dozen bombs (or flies an airplane) in a desperate and deliberate attempt to kill people who are near and dear to me. He is on a suicide mission because he does not have anything to live for. His father / mother / brother / sister / wife / child was “collateral damage” in a war funded by my money and he just could not find any other way to snap me out of my idyllic apathy and make me take notice.

And so, just this once when my conscience is pricked and I have decided to at least rant things out, let me come out and say - Please, stop using my tax dollars for funding your meaningless wars. And don’t tell me it is for freedom and democracy – I may be spineless, but I am not dumb.

Student Bloggers: Here Is You Chance To Make $10,000 From Your Blog!

Back in January, I had written about the Student Blogging Scholarships. Well, the deadline for the monster $10K scholarship is almost here! All you student bloggers out there have a little over 3 weeks to put the final shine on your blogs. The submission deadline for nominations is October 6th. Public voting will begin on October 8th and the winner will be declared on October 28th. For more information about the scholarship, check out the College Scholarships website.

Considering the hefty award amount and the broad scope, I suspect the competition will be quite stiff. I hope that one of you student bloggers writing about personal finance will win the scholarship – at least that way we can be sure that the winner won’t blow away the *entire* 10K on parties :) To help you add that final touch to your blog, here is a list of blogging tips shared by prominent personal finance bloggers. Good luck, and if you decide to put your name in the hat, be sure to leave a comment below so I (and hopefully some of the readers) can vote for you!

• 25 Steps To A Wildly Successful Personal Finance Blog by Jim at Blueprint for Financial Prosperity.


• How to Get Your Blog to 100,000 Visitors and Beyond (Series) by FMF at Free Money Finance


• How Not to Blog: Self-Defeating Behaviors by jdroth of Get Rich Slowly (Published at Meta Best Blog Win)


• Building a Better Blog for 2007 (Series) by Trent at The Simple Dollar.


• 50 Tips for New Personal Finance Bloggers by Clever Dude at Clever Dude.


• How to Start a Blog by Kira at Penny Foolish.

(I am sure there are many more good articles that I have missed - please feel free to share your favorites with the aspiring student bloggers!)

Two other sites that are not related to personal finance, but you must read (if you want to be a serious contender, that is) are Problogger and Copyblogger. Now be warned though, you could spend days together on each of these sites and not even realize it! And with the deadline so close, the more time you spend on reading about blogging, the less time you have to write on your blog – so watch out! I would recommend setting a restriction on how much time you allocate for improving your blog and how much for writing, *before* you visit either of these sites. To improve your efficiency, here are two good starting points for your quest

• 31 Days to Building a Better Blog (@ Problogger)


• How to Attract Links and Increase Web Traffic – The Ultimate Guide (@ Copyblogger). While you are there don’t forget to check out the magnetic headlines series too.
  

Well, good luck y’all. I sure hope a fellow finance blogger will take in the trophy this year. God knows there are enough of you out there who are well capable!

Do You Treat Missed Opportunities as Personal Loss?

While reading the book "One up on Wall Street" by Peter Lynch, I came across this concept of "regarding somebody else’s gains as your personal loss". While this concept is discussed in the book in the context of investing, it stuck a cord with me because of the way I treat the financial aspects of my personal life. My problem isn't exactly treating somebody else's gain as my personal loss. Rather, I view all missed opportunities (usually highlighted by somebody else's gain) as my personal loss. Let me explain –

I came to the US to get a Master’s degree and when I completed my degree I had two very lucrative job offers on my hands. At that time however, I had absolutely no concept of the importance of money and chose to turn down these offers and go for a Ph.D. In the decision process, money was not even a consideration. I have absolutely no regrets about this decision in general, but every now and then the financial implications of this decision strikes me with pangs of misery. I am quite sure every person out there who has chosen to go for a Ph.D. (or any other degree for that matter that requires a person to be in school for several years earning a little over minimum wages) can relate to a certain extent.

Further thought on this matter reveals that if everyone I know had made the same decision and was in the same financial boat as me, it probably would not bother me as much! But, on the contrary all my friends chose to take on well-paying jobs and start stabilizing their financial lives. During the course of the 4 years in school, I did realize that my friends were better off than me, but it did not really bother me much. When I completed my degree I had multiple job offers and while evaluating the different aspects of the package the huge gap between my financial situation and that of all my friends started to sink in. Among my offers, one company had no 401K match at all and the other had a 6% match. While I was reading up about whether this should be of any importance in my decision to accept an offer, I started to draw parallels between me and my friends. If all my friends had contributed the max to the 401K and had received at least a 3% match and earned an annual interest rate of 8% on their savings, then during the 4 years that I was in school, they had managed to put away around $75K towards their retirement account. That’s a *HUGE* head start when you consider the power of compounding and I don’t know if I can ever catch up.

Frankly, I don’t know if all my friends did contribute to the 401K or not. But I started to regard the lost opportunity as a personal loss. It was (and is to this day) a source of discontentment for me. While I have no regrets about spending the additional time in school (and view it as one of the nicest phases in my life), the fact that I did not know about 401K or IRA and did nothing to put away any money, is a thorn on my side. It is a great motivator for me to stay frugal and save as much as possible now. And maybe because of this keen sense of the “personal loss” I have a better appreciation for every penny I manage to save.

In the very long run, by the time we actually retire, I don’t know if it will really matter. Yes, I started late, but if I stay sensible from now on, maybe I can catch up eventually. Even if I don’t, I doubt if that will really bother me. Growing up in a middle class family, I am used to being surrounded by richer friends and have learnt to automatically disregard it. And, at this point in my life, I have come a long way from my childhood financial situation, and am quite content with what we have and feel blessed. So, why this sense of personal loss over lost opportunities? Why this self sabotage of the peace and happiness over a choice I made consciously (and will likely make again, knowing all that I know now)? Peace, happiness, contentment, joy – it seems human psychology has a masochistic tendency to destroy them every time you feel you have started to achieve them.

Do you treat missed opportunities as personal loss? Is it a real loss or is it a game your mind is playing with you? There must be a reason you missed those opportunities and in non-financial terms, maybe they mean a lot more to you than the money you could have made if your took those opportunities. So why fret and lose your peace of mind over it?

My One Money Advice

I generally only post on Mondays, Wednesdays and Fridays. But Loonies and Sense tagged me for the my one money advice meme over the weekend and coincidentally, there is this one piece of advice (a reminder actually) that I have been repeating to myself over and over during the past couple of days. So I decided to go ahead and jot it down. Here we go -

Never ever decide to do anything when you are not emotionally stable.

It's not necessarily "money advice" per se, but it applies very well to financial decisions as well. When we are disappointed, frustrated, depressed, angry or just plain blue, we generally tend to make silly mistakes that we later regret. When applied to our financial lives this could result in a shopping binge, dumping a stock before its time, paying a premium to take an impulse flight, banging a door so hard that it requires expensive repairs, whatever.... A split-second action can lead to a long period of regret. That's just not worth it. Wait it out - do what it takes to while the time away - go have a good cry, stuff your face in a pillow and scream, vegg out in front of the TV, write abstract blog posts, anything. Like everything else, this will also pass. Once you calm down, if it still feels like it is the right thing to do, then you can go ahead and do what needs to be done. For now, the only decision should be to put off a decision. Sometimes, procrastination can be a good thing.