Archive for December, 2007

Debated With My Wife Regarding Finances

December 31, 2007

I offered my wife 20% for my half of the rent $425 (which equals to about $0.24/day). I didn’t want the emotion attached as if I’m a loafer husband who’s not pulling in the dough, so that’s why I offered double of what she could get with her money anywhere else.  She currently has about $3K sitting in a bank account earning about 0.25%.

She argued that I’m always on the edge every time prop tax comes around and questioned why I didn’t get a part-time job.  I told her that I refused to get a minimum wage job which is a waste of time. Instead I would rather put that time towards building a passive income system.

She works as a waitress like almost every other actor in town, but it’s not sustainable.  She makes decent income and can save, but it’s not what she wants to do.  So I told her that we’re at the opposite ends of almost everything we do – which is an excellent opportunity to see what the other person is doing and learn from them.  She said it breaks her heart to see me not having money. I told her that it breaks my heart that she’s working til 1am and coming home in the cold dark nights alone.  But didn’t fight and just kept each other in check to make sure we’re doing the right thing with our time.  This set up is so much better than both of us being in the same boat and not seeing a different type of life.  I told her that she has to learn about passive income every single day – whether it’s real estate, stocks, google adsense, etc.

BE KNOWLEDGEFUL BEFORE A FINANCIAL WINDFALL COMES YOUR WAY
Many of our friends land commercial gigs which pay about $20K for just a day’s work.  She even landed one recently, but you don’t start learning about what to do with the money ONCE you have the money.  You have to start learning BEFORE you have that money.  Usually what happens is that you get that kind of money and then you end up trying to save it and then six months later you realized that you worked less and spent all that on bills – like it happened to one of our friends just recently.  She moved into a nicer apt instead of setting up a system.  So, now she’s worse off than BEFORE she got the $20K because she lives in a ‘nicer’ place, but doesn’t have any more of the $20K to pay for it.

WAYS TO STOP EATING OUT
Also, we don’t have a system for food.  We usually go out and get something to eat when we have nothing in the house.  We should have at least 4-5 healthy choice frozen dinners as a back up.  We don’t like eating those things, but when we have no home cooked meals, we can dig into that which costs about $2 a pop – compared to $15 for two by going to a fast food restaurant.  We’ve been buying bags of beans and rice which is really cheap and easy to make and always readily available.  Another thing that really clicked for me in terms of cooking –  not sure if I mentioned it before – is to make gourmet food at home for about $5.  Usually when you cook pasta or something, it’s cheap and tastes cheap.  However, we started making fresh fish which at a restaurant would cost you about $25/plate.  We can make that for $3 at home.

Quest for Passive Income

December 31, 2007

Yesterday I spent about 5 hours on the website adding amazon’s omakase ad links hoping to get some sort of return.  But I know this will not be an overnight return.  I’ve had this site for years, but haven’t done anything financial with it.  It’s only been about film.

Next I will add amazon ads specific to the articles.  Then I will add the google ads.  I keep documenting these to see how much time I’m putting into it and what the return will be like.

KEEPING COSTS DOWN – JONS GROCERY
Yesterday, my wife and I decided to try out Jons grocery store instead of Ralph’s.  We went there for the first time a few weeks back and found the prices of mushrooms and other veggies to be almost half if not even less than half of what Ralph’s charges.  I always avoided that store because it seemed so dingy and didn’t seem like they could buy in volume like the other local grocery by our house.  Furthermore, it seemed like a real-life spoof in the vain of McDowel’s in the movie Coming to America and how they are always competing with McDonald’s.
We walked around the cereal section and it actually cost more than Ralph’s esp when they have the ralph’s club card sale.  You could tell by the distribution of the people in the store that no one was in those isles.  When we walked to the produce section, it was buzzing like some street market in China.  Obviously that’s where the savings were.  Same goes for the frozen foods, milk, cheeses, etc – nothing was cheaper.  We found a $3 bottle of wine that tasted better than he $2 Charles Shaw at Trader Joe’s.  It’s called Forest Ville.

Accounts
Nothing has gone through in terms of balance transfers to bring down the $9K.  I think it’s because of the holidays.  I surprisingly have about $400 still in my account, but rent of $425 is due tomorrow.   And cable is due which is about $25 (we don’t have tv cable, just internet).  And gas $10.

I don’t have enough, but I might take a loan from my wife.  I know what you’re thinking, ‘you guys are weird. That’s so business-like in a relationship.’ But it’s two-part.  One, I don’t want to her to suffer financially as she’s trying not to touch her savings account. Two, I want her to get into the mindset of making money from her money – passive income.  I had to borrow some about 6 months ago (usually occurs when prop tax is due) and I gave her 20% interest.  However, I paid her back within a week, so she made about $3, but it’s still a mindset.

One of our friends makes about $200K a year, but he doesn’t have the mindset to make passive income, so he’s working his life away.  I’ve got another friend who’s much older and has a McMansion and only 3 people live in it.  He’s about 65 years old and still has to work to pay for the extra rooms in his house which he uses a couple of times a year.  I don’t understand the mentality of material possessions, esp huge houses which are not paid off.  It’s not like he loves his work.  He works to pay for the house.  Why not downsize, pay off a smaller house with the value of the current one and I’m sure he’s getting social security.  You can use that for the food and utilities, etc.

Whew! No late fees

December 30, 2007

I just check the BofA cc and they did not charge me a late fee, but did put another payment due on 1/5 for 254.  hopefully the balance transfer will go through by then.  Also they have a 4.99% balance transfer so after the 6 months if I don’t find more 0%, I can transfer it back to that.  I have a $13.5K credit limit so all of it can go there. well, ideally most of it will be paid off by then.

Google Adsense
All day yesterday I spent time adding content to my website in hopes of getting google adsense, amazon affiliate, etc on there.  I got it up to about 20 pages which is the minimum that previous article I linked to stated that adsense was looking for.

Now, I’m going to learn about SEO, and making money from blogging.

Hiding From Debt Doesn’t Work

December 30, 2007

12/30 – 11am – I kind of pulled an ostrich with its head buried in the sand when it came time to find out about the situation with the BofA cc on the 29th. I knew it was due, I only had $130 go through as a payment when the minimum was 390.  Even though I put a balance transfer of 2500, I knew it wouldn’t go through for days even though electronically it could’ve been done in a matter of seconds, but they just want to make you sweat.

Tip: One thing I’ve been doing recently is opening every piece of mail that comes in before I set it down in my pile of ‘to do bills’.  Before I would go weeks sometimes months not opening mail, esp bills.  I guess I figured that I knew the approximate amount and also that I could pay online.  However, one time it bit me hard in the butt.

I paid off a large amount of debt at once on my Discover card about 8 years ago.  I opened the invoice once after that and saw a zero balance due.  So for several months I did not open the invoice.  Immediately after paying off the amount, I got a Discover Cashback Bonus Award check. I signed it and cashed it like I had been doing previously for several years and didn’t think anything of it.

The check actually was not a check, but looked identical to their cashback check and in essence was a switch of my phone companies without a third party verification – SLAMMING.  My friend was living with me temporarily at the and was calling his wife who lived out of the country.  With the phone plan before the slam, he was getting about 30 cent/min, after the slam, it was at $2/min!!!  So needless to say, after a few months, I got SLAMMED!  I wasted hours on the phone with discover and talk.com, but eventually refused to pay for the $2K talk.com bill.  I offered to pay the amount it would have been at the regular rate, but they refused nothing but the full amount they wanted to steal from me.  It affected my credit for a while, but (tip) I wrote a one-line ‘defense’ in my credit report using teenage txt msg lik riting 2 kep da ct dwn as they would only give me about 100 characters to explain all that.

So, moral of the story?  Open every bill before you put it down.

Why Don’t The Schools Teach Personal Finance?

December 30, 2007

I watched a homeless news show/doc on TV last night and wondered why a mother and daughter who works would stay at a motel b/c they were homeless.  I can’t picture a motel going for any less than $30/night even in the worst neighborhoods of LA.  That totals to about $900/mo.  I live in an studio apt that’s only $850/mo in a nice part of town.  I just cheeked craigslist and found many at ranging from $400 – $600 in LA.  That’s ridiculous, as they have no stove or fridge.  It might be that they don’t have the proper credit to get an apt, but it stated that they had many relatives with whom they spent some time with.  I’m sure one of them could have co-signed for them.

One thing they keep saying is that everyone is about one paycheck away from homelessness and it can happen to anyone.  I keep thinking about that esp now when I’m not getting my regular check because the tenant will move out by tomorrow and this is the worst time to find new tenants.  My property manager said that next time he’ll do a 13-month lease so it won’t end up at this time again next year and instead will be in January – which is easier to rent.

I still can’t believe that personal finance is not taught in school and stuff that you’ll never use like Algebra is taught repeatedly – and I have been teaching and tutoring math and physics for years – I only use it in teachings, never in real life.  The first thing I’m teaching my kid is about FICO score, etc.

I think kiva.org is an awesome way which is based on the incredible Grameen bank which allows people to help themselves.  I have a hard time with charities as it’s not self-propagating.

I still can’t get over the fact that the homeless lady on the news was spending more than I was per month on rent.  I just don’t get it.

Chasing the Debt Consolidation Train

December 30, 2007

This post is from two days ago, I’ll try and be more timely with these.

3:07 PM – I just applied for the HSBC credit card with 0% balance transfer til 12/08. It was kind of confusing. At first it stated that I was approved for a $2750 credit limit, but after putting in all the balance transfers ($150 from my Chase cc and $2250 from BofA), it stated that I will get a confirmation if approved. These cards are so confusing. Why don’t they just speak plain English?

I also have the pending $9K application from Chase (which I doubt I’ll get b/c all these others have been around 2500), so it will be interesting as to what happens there.

If this goes through, then my BofA balance will be $3,960 @ 16.24% – finance charges of $53.56/mo ($642.78/yr). A few days ago it was hovering around $2100/yr. I can’t believe I was spending – not “spending” – but wasting that much money!!! I knew I was, but I never put it down on paper so it’s staring me in the face.

I’ve been wanting a digital SLR camera which would cost me around $1400 so I can take headshots and get it paid back. So, now I’ll be able to allocate these ‘missing funds’ towards investments.

Tip: I also bookmarked all my credit card sites in my mozilla firefox browser in the ‘toolbar’ area so I can see it readily. These cards have funky urls like wamucards.com instead of just accessing it from wamu.com.

FINANCIAL DEBATE WITH WIFEY EVEN THOUGH WE KEEP OUR FINANCES SEPARATE

December 30, 2007

8:16 PM – I’m writing everything financial that affects my life or that I think about.   My wife and I got into a heated debate about finances this morning when she told me that she bought a home appliance for $100. I said that you could have the same thing for $25.  We keep our finances separate as we don’t have enough to cover each others’ expenses yet.  We just got a joint checking and savings account, but it’s just sitting there kind of dormant. Then later on in the day I realized why it was bothering me even though she works and she can buy whatever she wants.  It’s that we can do things as a couple like travel to see our parents in completely different parts of the country because we’re always strapped for cash.  I said I wanted to go see my parents.  Usually I can finagle a free airline ticket through some sort of credit card type thing at least once a year.  But trying to get two is much tougher and not possible currently.  So I said that we have to budget for these things.  She said that home appliance was an unexpected purchase. I stated that ‘unexpected expenses’ have to calculated into the budget.  I had to go to the ER and that set me back about $600.  When you’re pulling in about $1200 and your expenses are $1400 and you get a $600 bill – even though I got them to take payments in installments, it was a setback.

Sidenote – Affecting My Dreams

December 30, 2007

12/30/07 2:53 AM (these t/d stamps are when these were actually written) –

Everything I did was film oriented – which is how I got into this mess, but lately everything is finance oriented.

I noticed that since I’ve been working on finances my dreams have become much grander in scope.  It doesn’t feel like ‘letterbox tunnel-vision’ it’s so vast with 300 feet tall views. I guess I gotta change up my paradigm every 5 years or so.  I just have to incorporate new stuff, not necessarily get rid of old stuff.  I’m always thirsty for knowledge.

Transfered balance to 0% card and saved!!!

December 28, 2007

Today I transferred $2330 of my bofa cc (credit card) with a rate of 16.24% which was costing me $115/mo ($1,390/yr) because the balance was around $8500.  So now after transferring to my wamu cc with 0% til 10/08, with a $70 transfer fee, my bofa payments dropped to $85/mo ($1010/yr) in finance charges.  I just applied for a second wamu card yesterday to get some more low balance transfer rates.  I’m kinda going crazy with it right now, and think I’ve gone over my 5-6 credit cards you should have.

Now, should I pay the minimum on these balance transfers and try and be a financial chess master and change it to another 0% offer in October or should I just try and pay it down? Hmmm….

I think I’m leaning towards keeping the balances and keeping the stocks in my trading account as they’re doing pretty good. Interest rate is my deciding factor.  I’m paying 0% in APR and I’m getting a higher interest rate.  Actually, just by leaving money in my wamu savings at 4.75% will be a better bet than paying off the cards as long as I don’t miss payments.

(Tips)

1) I have to set a reminder in my yahoo calendar for the 0% rate expiration in Oct ’08 – actually I set it for August 15th so it will give me some leeway as these applications take about a month to go through

2) I have to set up an autopayment of the minimum from  my checking account to this new card so I don’t lose the 0% rate as I have so frequently done so in the past.  I the $9K at 3.99% for the life of the debt, but had some overdrafts from my checking (read 1st blog).  Couldn’t find a due date or a minimum amount due in the wamu cc.

3) I set email reminders through the wamu cc site on the account itself for the following:
Payment Posted
Payment Due (sent 6 – 7 days prior)
Credit Limit Reached or Exceeded (your credit limit is $2,500.00)
Balance Exceeds ($2401.00)
FICO® Credit Score Changes by 20 points

However, I will have the autopayment going from the checking instead of it being pulled out through the cc site.  This way, all my auto payments are in one spot (my wamu checking).  So I have a much better idea if something is going to bounce.
Now I have to set up an overdraft protection for the checking account.  But make sure that it is ONLY for overdraft. Don’t have any 0% balances on there as I often do use the overdraft because I don’t make enough around bill time – namely, at the end of every month. I get my rent check around the 5th which is also after I have to pay rent.
The wamu cc gives you a free fico score. Mine is currently at 712 which is lower than my 725 experian score.  A little bummed, I feel like I got an A– instead of a A-.  C’est la vie.

Ok, what now?  well, I’m not sure when the money will transfer over and I believe $390 is due today.  I don’t have that much, but I sent in an autopayment of $130 a few days ago. I have to call to make sure they don’t charge me a late fee.  I’ll have to call when my wife comes back as I don’t have a phone right now.

I kinda reached one of my goals which was due today: change balances to 0%, but it’s not complete.  I’m going to apply for the HSBC 0% now.  Let’s see what happens to my FICO score with three applications going on at once. I’m sure it’ll dip, but after the balances are transfered and my minimum due per month goes down, I will have no late payments.

I’m going to keep working on my finances. I’ve been putting aside any sort of filmwork because  I can’t concentrate on my passion projects when these bills and late fees are looming over my head.

Fyguy

Looking for lucky zeroes! (APR, that is)

December 28, 2007

This morning (actually Thu morning), I got up with a vengence to transfer my high-interest card to 0% for 6 mos. I had two “preapproved” offers. Once I filled out the website form, I got a confirmation page saying that they’ll let me know in 30 days! 30 Days?!?!?! I have a bill of $390 due tomorrow! I thought it was going to be paid off. So, I’m not sure what to do. I think I should put the minimum onto another card – which I have thankfully at 0% for 6mos.

I told my wife to find out her balances and APRs and told her to call and tell them that she got offers. She got 3 of her interest rates down from 22% to 17%. At first, she was kinda sheepish when calling them, I told her that she’s doing them a favor by keeping the account with them. Just say that you have better offers. Instantly, the customer service operators switched it down.

She’s really good about doing what I recommend. However, I need to listen to myself more. She has been doing the 10% savings ever since I told her to last year and has now saved up about $2.5K. Me on the other hand saw my 2K depleated mysteriously. I live like a miser (which I’m getting sick of). I have holes in the crotch of all my pants – actually only have 3 pairs total.

So tomorrow, I’m going to try and build out a site and see if I can make google adsense work for me based on this ‘get rich quick scheme’ (which I totally don’t buy into). I figure if I make a fraction of what she claims to make, it’s still passive income. However, I’m also trying to make some money before the end of the month to pay rent. Not sure how I do it as I have $300 in my account and need another $450 for rent. My tenent from my condo moved out so, that’s going to delay any funds coming in for a few weeks, possibly. So, I’m preparing for the worst. Been on craigslist and actorsaccess, but paid gigs are few this time of year.

Also, I posted this response to Greengirl’ who’s an actor unlike the others on the site who are pulling in 100K or so on mymoneyblog.com when I was trying to figure out if I should pay down my credit cards or to keep funding my Roth-IRA:

Greengirl:
I’ve been doing the actingfilmmaking thing for about 7 years now. I didn’t care at all about my finances til last year when I got married (to an actress as well). We’re both determined to NOT get a ‘real job’ and keep at our dreams.

FICO FICO FICO!
The main thing I learned in this past year was to concentrate on getting my FICO score up to get my debt down. I managed to go from a 630 to a 725 in one year. Now, I have all these 0% credit card offers to which I’m transferring my high interest rates – some as high as 30%.

PASSIVE INCOME IS ONE OF THE SECRETS OF LIFE
Also you gotta keep your eye on the ‘passive income’ like your website (read Rich Dad Poor Dad if you haven’t already).
Last year I worked on over 35 passion projects (indies, student films, etc) which won many awards at festivals, but didn’t pay a dime – actually I lost money if you count the gas involved. This year I was determined to only get paid acting gigs, but didn’t enjoy them as much even though I made about $3.4K in acting – which I thought would’ve been impossible a year ago. FYI: The average SAG actor in LA makes about $6K/yr through acting. So having passive income from another source will let me choose passion over trying to get a gig just because it pays, but which I can’t stand.

I’ve been living on $1200/mo for everything. I’m usually in the hole by a 100 or 200, so I totally understand what you mean about Roth and 401K as not even being an option. So at the end of almost every month, I’m kinda scrambling for background work or something to the like. On paper, I look like crap, but in reality, I’m more stable than some guy who’s been at a job for 30 years is about to get laid off.

SAVING 10%
I got my savings account up to about $2K by just saving 10% of everything I brought in even if it was a $10 gas money from a student film. However, it went away b/c of medical bills (no health insurance previously, but got it now). I fell off the horse, but I’m determined to get back on.

The main reason I read this whole thing to the end was the debate b/w Roth funding or debt payment. I think I’d go towards clearing the debt til I become a financial chess-master like Jonathan. I’d rather write a screenplay than jump my credit cards around – even though I have autopayment now for the credit cards, I still miss something now and then and can lose the low APR. If I get rid of it and don’t accrue more (I only put $150 this year on credit. Everything else was paid in cash (aka debit card).

After 7 years, I’m kinda getting tired of the starving artist thing, but am determined to be financially smarter yet not get a day-job. I’ve been getting into real estate as well (flexible enough to make every audition). The main reason is that my parents are getting older and I want to see them and not have lame excuses like I don’t have enough money to fly out there.

Good luck, or um , break a leg. Keep me posted.