By now, most of you shoppers who were out and about yesterday morning should have recovered the lost sleep after coming home with bags of new stuff and a higher credit card balance. Contrary to popular beliefs, Black Friday was never a day dedicated to helping consumers save money – it is a custom promoted by retailers to encourage spending.

For some of the sleep-deprived shoppers, their post-Thanksgiving shopping spree may not have been the most financially sound decision for their particular situation. Blame the tradition, the profit-hungry retailers, and consumerism.

“Why Did I Buy This?”

It may have been a blast to weather the long hours in cold temperatures for the sake of grabbing an HDTV at a 50% discount… until you come home – after the dopamine and adrenaline in your system has dissipated. Because Black Friday is the biggest shopping day of the year, it is also the day that many consumers suffer their biggest case of buyer’s remorse.

It is entirely human to be tempted by a super sale and then to regret spending a ton of money when you shouldn’t have. Feeling bad about it will serve to build your ability to refrain from repeating it in the future.

To Mope and Sulk

1. Lay out the bags and stare at the new stuff you bought. Take a good look at the everything you just brought home. Don’t be fooled by the smile on your face as you scour the lovely new toys you just got. Remember: the higher you climb, the greater you’ll fall.
2. Log onto your credit card account and stare at your balance. A mere glance wouldn’t be suffice. Give your credit card balance about five minutes of attention. Let it really sink into your mind. If done correctly, there should be hints of worry and fear resonating in your chest.
3. Check your Mint.com account and stare at your net worth. Again, look at your whole financial position. Do you have abundant savings and formidable retirement accounts? It’s time to shed some light on your priorities when it comes to your money. This is the “big picture” and is worth a few minutes of your eyes’ time.
4. Go back and return what you bought. Yes, it may be humiliating to go back to the store to return an item that you waited 8 hours to buy. But, you provide one minute of humor to someone else and get (what possibly could be) a lifetime’s worth of financial comfort.

I definitely don’t sound like an advocate of Black Friday. The great deals should help shoppers who actually need something instead of simply picking up whatever offers the most discounts. These people are buying to be a part of this annual ritual of consumer madness.

(Photo credit: lrargerich)

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Mark Fisher is a self-made millionaire who shares a timeless story in his book The Instant Millionaire. This is not your typical book filled with tips on budgeting, saving hacks, and investing principles.

The tale covers a brief period of a young man’s life when he’s had enough of his dead-end job and decides to pay a visit to an old man known as the Instant Millionaire. The millionaire has an agenda from the start and uses a combination of ploys and conversations to teach his visitor the lessons he learned that made him a millionaire.

The lessons that I liked in The Instant Millionaire were:

• Goals are self-fulfilling prophecies, not objectives. Setting concrete goals to reach a seven figure net worth is the first key step to becoming a millionaire. Without a destination, we don’t know what path we should take and eventually end up going nowhere. Repetitive acknowledgement of the future has the magic of making it a reality.
• Words can be powerful. Not only do we have to set goals, we must write them down and say to ourselves that we achieve what we set out to accomplish. How much we believe in those words is crucial in how likely those words are to come true. So, the people who talk themselves in the mirror may not be crazy – but utilizing the power of words.
• Love thy work. The old millionaire in the story tells the young man that many millionaires continue working despite having amassed enough wealth to live for a long time. This is because they genuinely enjoy what they do and want to continue doing it regardless of how much money they have.

Great Start, Slow Ending
Throughout the first half of the book, the story progresses quite intriguingly with a slight vibe of mystery. At first, the encounter between the millionaire and the young man are thought-provoking and challenges our logical reasoning. By the latter half of the book, the teachings of the millionaire become spiritual in nature and they confer in elements of deeper meaning.

The transition from deliberate mind tricks to prolonged blabber disappointed me as I was hoping for more of the deceptive lessons to becoming a millionaire. But, Fisher finishes the story with a very surreal ending that left me spellbound.

Nevertheless, I loved how Fisher used a narrative story to his points across, which was a refreshing approach compared to the other books out there that are basically guides in personal finance. He probably had to do so since a motivational how-to guide to wealth would be quite dull and boring otherwise.

Overview
The Instant Millionaire is a quick two-hour read that motivates readers to chase what they want while enjoying the whole process. The title of the book may be deceiving since we’d expect the same old content voiced in all the other book titles with “millionaire” in it. Instead, it belongs in the self-development and motivational category with a tale that propels us into a mindset of a millionaire.

The book isn’t literally saying that one can become a millionaire with the blink of an eye but we can become a millionaire mentally. The Instant Millionaire delivers a philosophical approach that makes it a book that can be reread to stay focused on the goal of becoming a millionaire – which is probably a goal for most people.

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The release of the iPhone 4 has garnered an excessive amount of media attention, as should any other new product invented by Steve Jobs. Thanks to my semi-addiction to tech gadgets (not to forget being a frequent reader of Gizmodo), the iPhone 4 has certainly gotten my attention as well.

I’ve never been the type to upgrade my phone every year. But, I’ve definitely suffered from a slight lifestyle inflation after obtaining steady income coming out of college. That’s why I’m contemplating whether or not I should upgrade my 3GS for an iPhone 4.

There are probably a bunch of others who are going through the same dilemma. In my case, I know it would be the smarter financial move to hold out on upgrading – if I couldn’t resist it, I may find myself repeating history. So, I broke down the goodies in an iPhone 4 so I could convince myself not to get it, yet.

The most notable new features of the iPhone 4 and my take on them:

• Facetime video calling. Being able to see the person you are speaking to seems like a great technological advancement for a smartphone. But, honestly, I don’t think I’ll be using Facetime religiously (or ever) unless more people I know gets an iPhone 4.
• Retina display. The screen sports such high definition that it’s pixels are undistinguishable to the naked eye. Nothing bad to say – I can always go for more better displays.
• iOS4. Multitasking. Folders. Improved email interface. Customizable looks. Bunch of other stuff. These improvements are lovely but they are now available on the 3GS too. It’s almost like getting a new phone.
• HD video recording. To me, this feature is the upgrade that I find most appealing. Again though, I don’t find myself using this often but it is great to have ready.
• 5-megapixel camera with LED flash. Ever since I bought a DSLR, I guess I’ve become a stickler when it comes to digital photography (even though I’m just an amateur). The upgrades to the camera mean nothing to me. The camera on the iPhone 3GS still satisfies the spontaneous moments that I use it for.
• The new look. Without a doubt, the iPhone 4 is the sexiest phone to ever exist on the face of the earth (for now). While I don’t intend to ever drop my phones, this one seems extremely fragile compared to previous models.

The No-iPhone-4-For-Me Rationale
I feel that the iPhone 4 is simply a prettier version of the 3GS that contains features which I won’t find myself using at all. With iOS4 fully compatible with the 3GS, I’ve practically been offered the same increased productivity and operating experience available on the iPhone 4.

Plus:

1. It’ll cost me $399. Currently, I am not eligible for an upgrade since I got my iPhone 3GS last September. According to AT&T, my eligibility starts in April 2011 for the subsidized iPhone 4 pricing. Even if I sold my 16GB 3GS (going for roughly $220-$280 on eBay), I’ll still have to fork over $150 out-of-pocket.
2. Apple may have a few bugs to fix. As with many new technologies, there are often bugs that end up affecting consumers despite many months of testing. In the case of the iPhone 4, there have been funky antenna issues that affect reception due to the way you hold the phone.
3. There may be upgraded versions to come. Just like how Apple released the iPhone 3GS (up from the 3G), we could see Apple release a better version of the iPhone 4 next summer – which would coincide with the time when I’m eligible for an upgrade.

In my current situation, the right move is to wait it out. The cost-benefit analysis doesn’t justify paying such a hefty price for, what essentially is, a better looking phone. The tech aficionado in me wants to ditch the technicalities and just upgrade now but everything is indicating that I should wait in the sidelines.

(Photo credit: Yutaka Tsutano)

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Even with the best intentions, there always seems to be a bump on the road towards financial freedom. You want to save up for this but you also have to pay for that.

Can’t really catch a break can you?

So you and I both have financial goals that we want to accomplish. For me, I’ve been saving up to make Roth IRA contributions. But, I also have to pay off my student loan debt along with some credit card debt. My mind says that focusing on one goal at a time would be easier to stay motivated – since it would serve as a quick psychological win as well.

It turns out that giving my all towards a single goal just won’t work. That’s why so many personal finance experts advise on splitting discretionary income between savings and paying down debt. We must seek to balance the need for a fallback and the need to pay our dues.

Why Not Save, Exclusively
Putting 100% of your spendable income into a savings account will mean that you are paying the minimum towards your debt while the interest rate in your savings account won’t be able to match the interest on your debt. So, it is actually taking a step backwards because you’d be watching that scary interest start to rack up.

• Debt is will literally cause nightmares. It is the intangible “thing” breathing down your neck. It is the reason for worry, anxiety, and the feeling of never being able to get ahead.
• The detrimental mathematical fact is that debt grows bigger with time, which results in a hopelessly downward spiral. You are handing over money (minimum payment) but somehow, the balance continues to grow.

Why Not Reduce Debt, Wholeheartedly
Holding the status of debt-free puts you at the apex among personal finance aficionados. No wonder everyone strives to release themselves of the strangleholds of debt. Once it is achieved, the road to riches is much less bumpy. Obsession with debt repayment is a good thing but don’t dismiss the possibility of putting oneself into even more debt.

• The lack of an emergency fund or some sort or cash safety net is very much like going skydiving over mountains with no backup parachute – there is no room for error. But sadly, we are human and stuff happens (c’est la vie). An emergency fund of cash is easily accessible when spontaneous events occur without having to put yourself into more debt.

Split Between Savings and Debt
Sure, you may reach your financial goals later than you expected but going 50/50 will be a safe, yet productive, approach.

Once a substantial emergency fund of cash is built, it is time to let that debt-free obsession go into overdrive. Chase the psychological wins with your preferred method of debt reduction. Keep in mind to invest in a retirement plan such as a 401k and/or a Roth IRA.

So, the outline would look something like this:

1. 50% towards savings and 50% towards debt
2. Emergency fund established
3. 10% towards retirement and 90% towards debt
4. Debt-free status achieved
5. 20% towards retirement and 80% whatever the hell you want
6. Stay away from credit card debt

There is no perfect ratio. Shift a little extra towards saving or debt as you please but you must tackle both with reasonable force. Fifty-fifty is just a good place to start.

(Photo credit: nerovivo)

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Another year gone by and a new year is here to make things happen. In the years before, I’ve made money goals for myself and wasn’t able to make them materialize. I made the mistake of having too foolish of an outlook without a reasonable approach to achieve what I want.

Things are different now and I am now able, with devoted effort, to set financial goals that are realistically attainable. I have also decided to start holding myself somewhat accountable by tracking my progress here on Realm of Prosperity.

My financial goals probably won’t be that different from many others. I’ve noticed that keeping the list small and simple is the best way to go. Having too many goals increases the feeling that they are more of a burden. I’d rather reach one goal than to fail to meet five of them.

Without further ado, my goals for 2010 are:

1) Max out my Roth IRA. Pretty straightforward. I’ve taken time to seriously create my own fund allocation setup for my investment portfolio. Ever since putting in my first $1,000 into a mutual fund, I feel somewhat addicted to saving up money just to put into my Roth. I’m guessing this goal will be somewhat of a breeze for me since I won’t lack the initiative to do it.

• Target: $5,000 contribution

2) Pay off at least half of my higher-interest student loan. I graduated with two student loans at different interest rates. The student loan with the higher interest is at 6.441% and I’d like to remove that debt as soon as possible while using the low-interest loan to build a good credit history.

• Target: $3,100 outstanding loan balance

3) Track my progress. Yes, tracking my progress towards a goal is, in itself, a goal also. It will provide much need motivation and support.

That’s it. Plain and simple.

But I do have one secondary goal to (you know) keep it interesting. I will feel no regret if I don’t complete it. It is to:

• Save up for a DSLR camera. I’ve had a growing interest in photography in the past year. Although I have almost no knowledge of how to take a great photo or what makes a great photo, I’d love to learn. These babies are known to run at least several hundred dollars. To me, it would be a great hobby (and potentially become a source of income) but it is still a luxury that I will get only when I can afford it.

Making goals may be a small step now but it could become a great step towards prosperity.

And to everyone else: I hope 2010 is another year of prosperity and health to you as well!

(Photo credit: frli)

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For some people, exchanging gifts is a valued tradition and is an act of love. For others, it has become a chore and a dreaded financial burden.

For some people, the value of the gift never compares to the value of this loving gesture. For others, it is about getting that iPhone or that expensive video game system.

What We Normally Do
The conventional practice has been that the gift-giver removes any stickers and tags that may reveal the price of the item(s). This could be a method of ensuring that the gift isn’t judged on monetary value but on the thought that went into it.

But, as social norms undergo perpetual changes, we are alright with leaving price tags on gifts because we are now okay with the recipient returning or exchanging their gifts if they didn’t meet their expectations.

Yet, there are still those who believe that gifts should hold a sentimental value. These people cherish what materialists do not.

Some reasons I would remove the price tags were if:

• I do not want to reveal my financial status. The price of a gift can give away how much I can afford and I may not want to expose my financial glory or demise.
• I believe that the spirit of Christmas doesn’t carry a “$” sign. Maybe I feel that my initiative to even give out gifts is already a holiday miracle…
• I already know it is on a person’s Christmas wish list. Take out the guessing work and asking them “what is on your wish list?”. They won’t refund what they wanted.

Some reasons I would keep the price tags on would be:

• I purposely want to flaunt my wealth. “Look, I’m rich. I got you all 60” HDTVs just because I can afford it”.
• I am not entirely sure the recipient wants it. I thought that person may like this present but I’d hand over the gift receipt along with it – in case they’d like to exchange or return it.
• I simply don’t care. Why stress over this matter?

After all, isn’t it the smile that we want to see as they ravage the perfectly wrapped present when they open it?

(Photo credit: Randy Stewart)

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Well… I just got TurboTax 2008 and it’ll be the first time that I actually do my taxes by myself. From what my parents told me, they normally pay an accountant about $80-$90 per tax return and it costs even more if one’s got real estate and investments. Since I get the tax software for free, I guess I’ll be saving my parents about $120 if they don’t file for me.

What I want to do is be able to do the taxes for my whole family so they don’t have to spend a load of money on someone to do their taxes when someone at home is fully capable of doing it for them. There is a problem with me wanting to help out because my parents seem to have a really complex management style over their finances, such as trying to avoid paying less taxes and getting a larger refund.

Advantages of an accountant:

• They know how to get you the best tax refund through methods while tax software might not.
• They can know how to FUDGE THE NUMBERS.
• They’ll teach you HOW TO FUDGE THE NUMBERS.

Advantages of tax software:

• It might find something that your accountant missed.
• It is less expensive than a paid professional.

It may seem wiser to consult a financial professional first and learn more about taxes before trying to do them yourself. But since I have very little to file, though I still have to, I’ll just try the software. As for helping my parents, I’ll see how much the accountant can get refunded to my parents and compare it with what I get through TurboTax. If I am close, then maybe I can start helping out next year.

Idea! This is a potential side gig if I can do taxes efficiently and correctly.

Photo credit: ehpien

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As graduation inches closer and closer, family and friends are concerned about what my plans will be after college. Although it is getting somewhat annoying when I keep hearing the same questions, their worries (especially from my parents) are understandable. In this harsh economic time, all college graduates have no guarantees of a secure job.

My plans continue to revolve around getting in dental school, as stated in the About page. Over the next few months, I’ll be working on my application. I’ll be taking the Dental Admissions Test in June. This is the top priority on my list. My parents keep telling me that I should make sure I have a job coming out of college but they do not know much about the process of getting into graduate school. Even if I apply, I’ll still have one year’s time before matriculation (if I get in). Upon graduation, I’ll be a certified EMT-Basic.

According to Salary.com, the average annual salary of this title is about $34,000. It seems like a great thing to do for the year off, but I’ll be returning to the dental office, at which I interned last summer, for a possible paid position. If that works out well, I’ll search for a part-time gig as an EMT-Basic for some extra income.

Many people look at me and think that I will have many problems after college because of my supposed lack of motivation. No matter how things seem to be, I always believe “the ship will right itself”.

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Our HP All-in-one printer is running out of ink and the search for new ink cartridges has led to the stark realization of how expensive they cost. Yes, everyone has accepted their prices as beating (not in the good way) all other liquids including crude oil and blood.

According to Staples, a black ink cartridge and a tricolor ink cartridge would cost $23.99 and $39.99, respectively. This comes to a total of $62.99. Now looking back at how much we bought the printer three years ago, it didn’t exceed $100. The ink, alone, makes up over 60% of the cost of a printer! So the cool machine that can perform a number of office tasks is only worth about $40?

Since ink costs so much, it would seem like a better idea to just get a newer and more technologically advanced printer. My father is considering this but I always tend to do a little research online before making final decisions.

First, I looked to see if the prices of a similar printer were close to the price of our current printer. Surely, there are many choices out there. Still, it was a major purchase and it could be avoided if we had other options. Next, I gave my good friend eBay a visit. I didn’t look for a deal on printers but I searched for compatible ink cartridges in hopes of finding cheaper prices.

To my amazement, there were black and color ink cartridges for about $10 each, which would come to $20 if I purchased one of each. There is a vast price difference between buying them at Staples. Then again, these ink cartridges are of a generic brand and that might comprise the quality of the ink.

We decided to try out the generic brand ink because:

• If the quality of the ink is bad, then we are out just $20 and we can go on to get a new printer.
• If the quality of the ink is good, then we will know where to buy ink for the next few years.

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Recently, I got a visit from a friend and he revealed his current financial status to me. Although he has a seemingly stable job, he’s burdened with many financial responsibilities and debt that are typical of most college graduates. They include:

• Student loans
• Car loans + insurance
• Credit cards (~$10,000)
• Living expenses (rent, food, and etc.)

He tells me that he’ll be receiving a windfall of approximately $10,000 and he wants to take advantage of the cheap stock market. As a friend and cautious money manager, I highly advised against putting that kind of money in stocks. Although my friend is fully aware of his tight situation, he is hoping that stocks would actually make enough to cover his monthly payments plus more. While that is entirely possible, I suggested the safer road – debt removal. The reasons being:

• The ability to clear debt is 100% certain. In our current economic state, the stock market doesn’t guarantee a positive return.
• Removal of debt relieves a source of psychological stress. Participating in the stock market would add a source of psychological stress.
• Debt is the major roadblock to wealth. Debt accumulates if it isn’t paid off in a timely manner. It will remain a money-sucking leech unless it is completely removed.

I introduced to him the two popular debt removal methods: the Debt Snowball by Dave Ramsey and the Debt Avalanche by Flexo at Consumerism Commentary. Luckily, he had an ING Direct savings account, so mentioned the use of a CD ladder for a higher interest rate and to resist the temptation to spend.

Despite know that I provided useful fundamentals to personal finance, I wonder “what if the stock markets takes a turn for the good”. Surely, at his young age, he should be taking more risks right? What are your thoughts?

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