penny for my thoughts

Two days ago, I watched a co-worker of mine proceed to drop pennies (copper 1 cent piece) in the trash. I was astonished. He was looking for change to get something from the snack machine, I offered him 3 pennies (not nearly enough for a snack, but that is what I was willing to give). Without blinking he cupped his hand around the pennies and dropped them into the trash. -Such disregard for money. It was like pennies are scrap metal w/o any resale value. Now, I could respect him saying "keep your pennies", but throwing away my gesture of currency... Here are some hard numbers for those who dislike the (highly liquid, metal is worth more than the face value) penny.



Saving 15 cents a day (an arbitrary illustration figure) after 5 years you would have 273 dollars & 75 pennies. -Not a lot, granted, for 5 years worth of conscience effort. After 30 years, 1,642 dollars & 50 pennies. -If you invested the $54.75 per year into an Index Fund with an average ROI of 8%, after 30 years you would have $6,800.51 (w/o taxation or dividends). Averaging 226.68 per year. The more you put sooner, the better the final number. Now let's be honest, that is a decent number... however, we all know that we could get the same returns with less effort (daily putting aside money) and opportunity costs by just simply saving $18.89 a month for 30 years.



What's most important about appreciating pennies is the derivative intangible benefits. It has to do with the fact that money goes to were it is better appreciated. Money has but this one prejudice. You must appreciate money in all of it's forms. Money is attracted to the one who takes care and monitors their money. "He who is responsible with little...." It all starts with a conscience decision today that you will never, ever purpose to throw away money. Unlike marriage, with money you should place emphasis on the details. Pay attention to how many pennies are being wasted every time you don't use a coupon or take an extra trip to the grocery store. Ask yourself if it is worth the waste. Of course, in this society we can never be 100% efficient. There is going to be waste, lots of it. But we should try to maintain it as best as we can.



But that is not all, coins have collector value (if you don't clean it first). In this article, the collector mentions that a circulated (one you might find lying casually in the street) 1813 penny could be anywhere from $200 to $900. It might take you a while to find this specimen, but if you already have money (penny) saving habits clearly established I am convinced that you will eventually find a gem of this sort.

If you have been monitoring my site, I recently put up hard commodities & bond charts. A casual mutual fund (buy and hold for the long term) investor might think that this is a waste of time monitoring these indicators. But I have to disagree. In fact, you have to be either living in a cave or blinded by pride to think that buy and hold is going to comfortably take you into retirement. There needs to be a balance. "Trade less, not more. Every trade is an opportunity to lose." -Larry Williams. You can't just keep blindly buying into a market. Strategize. Have defined rules as to what would take you out of a market, and what would make you enter a market. The exit is always more important that entering a trade.

Keep in mind that bond prices drop before a stock market "correction". Bond prices are associated with the value of the U.S. Dollar, the greedy capitalistic nation it is. When there is less demand in United States Bonds, the bears have essentially made their case for a devalued dollar. This could be because the government was 'printing' too much money (increasing the amount which banks can loan versus the cash in vaults, lowering the interest rate). Too much of this 'cheap money' going around makes the dollar itself worth less. When bonds go up, it is assumed that there is less money being 'floated' (interest rates make money less accessible, banks have more money in their vaults). When our dollar is worth more, US backed securities are very attractive to foreign investors. Foreign investors like to take advantage of the high yield on our interest rates. Banks increase the interest that they are requiring for a loan and thus they can pay more interest.



Gold on the other hand, correlates to fear. Those who (like myself) have a holding of gold (or silver, platinum, & palladium) assume that the dollar will eventually 'break' and that tangibles are going to be in high demand. The fact that our fiscal currency is only backed by what number is written on the piece of paper (by the fed), is discouraging for some people. In the years of 'yore', the first banks were goldsmiths. These goldsmiths where the ones who took deposits and wrote out loans against their holdings. When the foreign investors (namely European and Middle Eastern) start withdrawing large lots of money from our economy, our dollar will become depressed. This could be brought on by many different things. The most popular reasons for those world banks to lose faith in our economy is national debt, namely brought on by war & an aging population (pension plans & government subsidized healthcare).


Bonds down & Gold down = bullish.
Bonds up & Gold up = bearish.
-Larry Williams

Larry also says that you have to be fearful of the market. The more comfortable you are with it, the more likely you are going to lose money. Be ready to cut your loses in an instant if the trend does not go your way.

I know, I know...I should post more often.

The was looking through Engadget the other day and was intrigued with the idea of getting a $500 notebook computer after reading how reasonable (performance and cost) they are. Already I am a "road warrior" (chrome messenger bag, Treo 700p smartphone, iPod)... this would bring me to a new level. Our current apple is a 1.6ghz (first gen, base model) G5 that is a couple of years old. Still works good for media (and reasonably well with videos -mainly because of the software). Whenever the wife and I go to a coffee shop and someone has a laptop in the corner... I always eat my heart out and sometimes I verbalize it by saying, "I should get a laptop so I can trade wherever I want. Panera, Caribou, the cafeteria in the St. Paul skyway, &c... Then I don't need to go home to do my studies and research." And, let's face it...it would be nice to have a cheap windows machine so that I can test any stock/currency trading programs (which are not made for the mac) and if it breaks after a couple of years... no big deal. I was reading the other day and it seems that HP has a strategy to make more $500 laptops, which means more competition in the marketplace... I have also been looking at the Inspiron 1501 models. Those dual core 64 bit chips seem very competitive (both in price and performance) to the intel's.

On a side note, I was geotagging my flickr site. It gave me the perspective that I haven't traveled much recently. -This will change when I start going to the Forex Trading Expos in Las Vegas and New York.



As a way to "save money" (-actually, we spent money), the wife and I purchased some impulse decoration items at Target that we were kind of fixing to get for halloween, but on November 1st. With a 50% discount (and a $10 charge we expected didn't happen), brought it to $28 (not including $10). -Not too bad when compared to the $70 we would have spent. We made a conscience decision that day (day after halloween). When we have a kid, we are going to purchase the costume the day after and take pictures of the infant in said costume the day after. Reason being, in Minnesota... it is cold here. Very young kids aren't going to be wearing thier costume door to door unless they are wearing a jacket over it. It's not like the neighbors ask the kids to see thier costume under the jackets. And all the memory photos are taken indoors (with decoration). The kid doesn't know what day it is or (if they are an infant) even if they are wearing a costume at all. Being that a good costume for a kid would run you $30, that is a $15 savings. In case there is some of you that don't appreciate the savings of $15; if you were saving $15 a week for a year you would have $780.



I front loaded some hours earlier this week and I got the day off. So, I tried my hand at demo trading on AC-Markets. -didn't do very well though. Lost about $200 then I decided to quit for the day. Mind you, I have been away from demo-ing lately, been reading and listening to podcasts. I need to get back into my demo trading routine again. Which includes waking up at 4:45 listen to the Forex Podcasts and reading FXstreetarticles.

My 9 to 5, I got to say... is amusing to say the least. It's nice to see that all the oppression that I had on my previous team not happening to my team. Makes me appreciate what "department" I am in. I was told by a coworker of mine that he thinks that the company will close shop by the beginning of the year. He had the assumption that the policies that they are making encourage employees to get fired. And that the firings is what prevents the company to pay for unemployment. A sound theory IMO.



I have heard a lot of "buzz" on the podcasts that the dollar could get hurt end of this quarter based on a bias towards low retail numbers for the shopping season.


Also would like to mention that anyone thinking about purchasing a house (you know who you are) should be strong with your bid and not be affraid to pass up a so-called "dream home". Put in your bid, don't be anxious... stand strong. There are plenty of houses out there. As humans, we should not love things. So a house is just a place to live, if you expect it to be more than that (i.e. a sign of status to your family/friends or "inspiration" to be a successful parent/employee)... Then I can guarantee that you will be paying a premium for that house. It might not seem like a lot to pay a premium of $10,000 to secure the house "of your dreams". But you have to realize that the $10,000 (or more) is going to be over a thirty year loan. Let's say your mortgage rate is 6% -over 30 years that $10,000 turns into $57,434!! Let's be patient people.



BTW, if you put the $10,000 you "saved" into an index fund (averaging 8% a year) at the end of 30 years (not including taxes or potential dividends) would yield you $100,626.56. However, I would be willing to excuse those who purchase a premium on a house because they did due diligence (or bid on a forclosure) for the house to be an investment or tax write off vehicle. We all need to realize that our houses are not assets, the appreciation of your house is a wash because of all the maintenance and taxes that you pay. All you should be expecting to get out of your house is a place to live in (and be reasonably comfortable) and retain it's value enough to cover the costs to maintain it.



BTW, the wife was looking into getting a new car insurance policy and we found out that Progressive reported that she had an accident eventhough my wife was the one who paid for it, yet we are paying Progressive a premium as if they paid for the accident. If you haven't searched for cheaper car insurance for the last 2 years, I recommend that you do... might find a cheaper policy. *shrug*

Just so you know that my comments are not a "I'm smarter about my money than you," I just want you to visit Financial Fix-ups. We would not wish these financial situations on anyone. Everyone of us needs to start being responsible about our finances. We need to consistantly evaluate and re-evaluate our income and expenses. It might seem like we are depriving ourselves of what we want or what we "deserve" today. But Believe ME, what you are going to have tomorrow for making the right decision today is going to be worth exponentially more than what you thought that you wanted now.