Why you should stop complaining about Obama and the budget — and fix yourself first

I wrote this a few months ago, when the entire country was freaking out about Obama’s budget and the bailout, but never got around to posting it. Even though it’s a few months old, I cover why people love to complain about taxes, macro-policy questions, and Obama, but fail to spend even 1 hour managing their own money.

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Turn on the TV or read any comments section of an online newspaper — even the New York Times — and you will quickly feel the need to take a shower and to physically distance yourself from common citizens of dubious intellect.

You’ll notice people complaining about their taxes, while never optimizing their own cut their own spending, earn more, or optimize their spending (like in the Save $1,000 in 30 Days Challenge).

The problem is multi-faceted:

First, once something incurs spending, it’s incredibly difficult to stop spending on it. Why? On a national level, because there’s momentum, jobs, and opposition to change. On an individual level, we’re more motivated by loss than by gain, so it’s easier to do nothing than to take away something we’ve grown accustomed to.

Second, people get emotional. You see this with jobs and taxes (and rightfully so), but also with areas as prosaic as design changes on Facebook. In many/most circumstances, we don’t like change, and we over-emphasize our own interests (”I CAN’T UNDERSTAND WHY THEY DON’T MAKE A MAC PRODUCT!!! GRRR!!), while never seeing the big picture (Macs have a ridiculously small market share).

Third, the natural progression is to do more: more staff, more funding, more spending. Without a conscious spending plan, you’ll find that executing a Think, Want, Do analysis will reveal some huge disparities in where you think your money is going vs. where it’s actually going.

Let’s take a look at some numbers.

Federal spending almost always increases

Those numbers are in billions. From Heritage.org.

When people argue about a local issue, where does that fit into the bigger picture?

Stunning visualization of Obama’s announced $100m budget cut

Now, you can take a couple routes after seeing these:

1. Complain about Obama, Democrats, Republicans, the war in Iraq, etc. The funny thing is, people love to debate minutiae but fail to realize that energy is a valuable resource — and it’d be much more productive to focus on things we can control (like our asset allocation, automation, negotiation, etc). If you do this, you are just like everybody else who loves to complain but does nothing to improve their own finances.

2. Realize that the real message of this post is to focus on the BIG WINS — the things that let us save significant amounts of money. While it might be fun and emotionally liberating to debate over some local issue, the way to move the federal budget forward is to fix the 800-lb gorilla: healthcare costs. The same is true of your spending: The very first tip in my Scrooge Strategy is called the Two-Headed Savings Approach, where I show you how to focus on dramatically cutting the costs on your two biggest discretionary expenses, rather than trying to save 5% on 50 things (as most people do), and ending up feeling guilty and achieving no behavioral change.

Stop complaining about things you can’t control. Realize that the correlation between macro-economic and political decisions has very little to do with our money on a day-to-day basis. Most importantly, we’re cognitive misers, and only have a limited amount of attention. Focus on your own finances first, and let the fools (or politicians) debate the macro-level.

Can you Cash in on Cash for Refrigerators?

Feeling a little bit left out on the whole ‘Cash for Clunkers’ program? Well, you may soon have your chance to get in on the tax credit sweepstakes game through a proposed government rebate incentive program that will likely begin this fall. The program will be similar to Clunkers in that it is simultaneously meant to stimulate a slumping industry (household appliances) while reducing our country’s dependence on energy.

The program has already been dubbed ‘Cash for Refrigerators’ after the success of the ‘Clunkers’ moniker. $300 million has been allocated to this program, and if you’ve been in the market for a new appliance, you will now have more incentive to buy an energy efficient version. 

Cash for Refrigerators Details

Apparently, each state will be modifying details of the program since many states already have tax credits for the purchase of energy efficient appliances. Here are some of the general Cash for Refrigerator guidelines that we can expect:

• Not just for refrigerators – it will also include dishwashers, washers, dryers, and other major household appliances (a complete list has not been circulated).
• Will start in the next month and end in November.
• Appliance must be ‘Energy Star’ approved.
• Rebates start at $50 and go up to $200.
• You do not need to trade in your previous appliance.

On that last point, if the retailer you buy your new appliance from is willing to take away your appliance for free, then be thankful. You can also donate working appliances to local charities, such as the Salvation Army or Goodwill (but you usually have to lug it out to the curb as they will not take it otherwise). Check with your local charity for more details. Another option would be to give away the old appliance through Freecycle or Craigslist.

Personal Thoughts on Cash for Refrigerators

I am a fan of Cash for Refrigerators in that it is helping to push energy efficiency, but disappointed that the program does not require the older model to be turned in. Granted, unlike ‘Clunkers’, there is no way to prove that you had owned and been using whatever piece of crap appliance you’d be turning in, but it would still guarantee that those energy hogging appliances were removed from the circuit. Otherwise, what is stopping people from moving the old hog down to the basement or into the garage? Although, I must say, Kegerator modifications are wholly endorsed.

To the Readers:

• Did you take advantage of Cash for Clunkers?
• Would you buy a new appliance to get a rebate from the Cash for Refrigerators program?
• Are your appliances Energy Star approved?

If you found this article helpful, subscribe to the 20SomethingFinance RSS feed, or sign up for free email updates. You may also find the following article of interest:

Green Matters: Reducing my Commute will Fund my Retirement; 10 Ways you can Save at the Pump!

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Zecco Coupon Code for Free Trades – Limited Time Only

I’ve been a pretty big fan of Zecco for their low cost and easy to use trading platform, which I use for my personal non-retirement investment account. You can check out my Zecco review if you’re interested. Typically, Zecco has offered $0 stock trades if you carry a balance of $25,000 or more. If you want to try their service out, but don’t have that kind of cash, now might be a good time to do so and not pay anything for your trades. 

Zecco just announced that they are offering 20 free stock trades — a $90 value — to all new brokerage customers who sign up by Sunday, September 13th 2009! You need to use a special bonus code (below) to do so.

These trades are additional to the 10 free stock trades Zecco customers get every month when they keep a balance of $25,000 or make 25 free trades per month. If you don’t reach the $25,000 plateau, trades are just $4.50 each otherwise.

To take advantage of this promo, click on the following link to join Zecco and use bonus code “bonus1″when signing up. Be sure to use all lowercase or the code won’t work.

Here are the terms and conditions:

• New Zecco Trading accounts must be opened and approved by Sunday, September 13th, 2009.
• The 20 free stock trades will be granted on or before September 16th, 2009. The free trades will expire 90 days after the date they are granted.
• Offer not eligible to existing Zecco Trading customers.
• Limit one bonus per household.

If you found this article helpful, you can subscribe to the 20somethingfinance RSS feed, or sign up for free email updates. You may also find the following articles of interest:

How to Make a Stock Trade

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Don’t Move Without First Using these 4 Real Estate Search Tools

When looking to buy a house or move into a new apartment, there are a few essential real estate sites out there that you may want to first visit to complete your research. Each has advantages and disadvantages, but when used in combination, you should be able to make an informed move. Do your research on these sites before making your move! 

1. MapsKrieg – for Craiglist Listings on Google Maps

Whether buying a house or looking for an apartment, Mapskrieg is a mashup of Craigslist postings on Google Maps. Why look at Craigslist listings? For starters, Craigslist is a preferred site to list a house for those selling ‘For Sale by Owner’. Also, if you’re looking for an apartment, you can often find discounted subleases and renters looking to rent out a room or two in their homes. Often times, you won’t find these postings anywhere else (because these people want to post for free).

2. Google Real Estate Search – for all Real Estate Searches

Google Real Estate Search is a real estate overlay on Google Maps. To get there:

1. Go to maps.google.com
2. Search for your desired city
3. Click ‘My Maps’
4. Click ‘Google Real Estate Search’

I’ve found Google Real Estate Search to have listings from most major real estate companies, who submit their postings to Google Base. It is one of the most extensive map listings out there, and you can even plot out your tour from one place to the next!

3. Zillow – for Pricing Homes

Zillow is the ultimate price comparison tool. Zillow maps recently sold homes, homes for sale, and ‘make me move’ homes for those not actively looking to move but are open to offers. If you are pricing how much a home is worth, you can see comparable nearby homes. Additionally, you can see what the home last sold for and what recent taxes on it were. All very useful data in helping you determine how much you want to pay for a home. One caveat is that the ‘Zestimate’ price often fluctuates wildly based on how much nearby homes have sold for. I’d take it with a grain of salt.

4. Hotpads – for Demographic and Neighborhood Information

Hotpads is another map-style search tool that clearly depicts rentals vs. homes. Prices for different numbers of rooms on apartment complexes are all listed. You are also able to overlay heat maps for demographic information including income and age as well as average rental prices. Use Hotpads to get a better sense of different neighborhoods that you are looking to move into.

To the Readers:

• What real estate sites do you recommend using?
• What site did you find your present home/apartment on?

If you found this article helpful, subscribe to my free RSS feed, or sign up for free email updates! You may also find the following article of interest:

You May be Ready to Buy your First Home If…

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The Craigslist Penis Effect

Every woman who has used Craigslist knows that it is a veritable jungle of unexpected penises. In other words, if you’ve ever posted a nice, g-rated “women seeking men” post, you will immediately and inexplicably have 50-80 pictures of men’s penises in your inbox.

After this happened to a number of my friends, I started thinking.

Not just about how horrible men are at online dating, but how to use this to my advantage.

Introducing The Craigslist Penis Effect

The Craigslist Penis Effect describes situations where everyone else is so horrible that, by being even half-decent, you can dominate everyone else and win.

These moron men on Craigslist would be better served writing 5 half-decent responses, testing to see which got the best response, and then sending it out instead of a picture of their generally mediocre manhood. I did exactly that for my friend on JDate and ended up getting very good at introducing girls to him. (Jewish women, beware of my Ashkenazi skills.)

Let’s take some examples where everyone else is so terrible that you can dominate by being even somewhat competent.

• Negotiations. Most people are awful negotiators (especially for jobs and especially in America). That’s because nobody teaches us how to negotiate — indeed, we’re actively taught that it’s “weird” and “awkward” to negotiate. By contrast, I find it “weird” to lose $10,000 because you didn’t take 5 hours to practice your negotiating pitch beforehand, like my friend Rachel did. By simply starting a negotiation, you stand out from 80% of other applicants.
• Writing effective emails. Most people send out dozens of emails per day. Yet when was the last time they studied the best emailers to learn techniques to (1) get busy people to respond to them, (2) cut down on back-and-forth emails, and (3) get what they wanted via email? (I’m working on a product with 50 email scripts you can use today. Newsletter subscribers get first crack.)
• Conferences. Most conferences are boring and bad. But so are most conference go-ers, who don’t do their homework beforehand, eat with their co-worker, and miss the prime benefits of networking. (The book Never Eat Alone has a magical chapter on how to be a master networker at conferences.)
• Exercise. Go for a 30-minute run every day and you’ll be in better shape than 90% of adult Americans. Stop debating minutiae about health and get off your ass.
• Holding onto expensive purchases for years (even decades). We love to buy expensive things like houses and cars, then turn around and sell them 5 years later. This is literally one of the most poisonous financial decisions you can make: Not only do you incur huge transaction costs, but you condition yourself to think that buying and selling expensive goods every few years is normal. Instead, if you can use the Tripod of Stability to make major purchases, you can spend that money on things that you love — rather than transaction fees.
• Earning money online. As Erica Douglass recently said, “If you earn $1 online, you’re doing better than 90% of people.”

This goes back to my post about Big Wins, including why trying to save money on lattes is pointless for many people.

As you can see, many Big Wins are actually easily within reach — if you choose the right targets and differentiate yourself from others. While you’ll have a few areas of life where you’ll have to go up against formidable competition, many other areas of life are wide open.

For those, don’t waste your time competing with lame Craigslist penis guys in a race to mediocrity. Instead, think about areas where your competition is mediocre (where everyone is doing the same thing, and doing it poorly) and carefully test multiple strategies to dominate. The Craigslist Penis Effect is a guide to standing out from others when being even half-competent can get you superb results. There are literally thousands of these opportunities.

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See me in San Francisco: I’ll be speaking at the Commonwealth Club in San Francisco this Monday, 8/24. Considering the background — they frequently host Presidents, military leaders, authors, and scientists — I probably won’t be mentioning the Craigslist Penis Effect. Event details.

How to

What does it take to retire at an early age? Clark shares wisdom gleaned from when he retired for the first time at age 31.

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