It amuses me that the quietest weeks on the surface of Get Rich Slowly are the most tumultuous underneath. The blog entries this week have been mild, but there’s been a lot going on behind the scenes. Of course, the weeks where there are lots of big posts and raging discussions are generally the ones during which I spend my time loafing around reading comic books.
You folks have been busy, too, filling my inbox with all sorts of interesting articles. Here are a few:
This morning, Mike Young shared the story of his ongoing battle with lifestyle inflation. This prompted Jamie to send me a New York Times piece about “bling training”, the pressure baseball players experience to upgrade their lifestyle. Former major-league outfielder Doug Glanville writes:
And so, all of a sudden, whatever you have is not enough. In fact, what you thought you wanted is not enough. It was fine in Single-A ball, but it’s not going to pass the test in Triple-A. It is an internal battle to keep up with the Joneses, and it can play out in any area of your life if you are not careful.
This is a great article, and a perfect complement to this morning’s story.
Next up, Tim sent me the story of pharmacist from Brewton, Alabama who has launched his own homegrown economic stimulus package with $2 bills. From the article: “Danny Cottrell gave each of his full-time employees $700 and part-timers $300. He asked them to donate 15 percent to charity and spend the rest locally, particularly downtown, where store owners say that business has been lean.” This is a nice story — and the last line is hilarious.
Last week at The Wall Street Journal, James B. Stewart asked, “Have we hit bottom?” Obviously, the answer was “no”. Stewart argues that it’s impossible to know exactly when the stock market will reach bottom, and it’s dangerous to try to guess. He says that “the risks of being underexposed to stocks now strikes me as especially acute.” He thinks it’s a good idea to get in the market, risking some short-term declines for long-term profits.
Finally, I recently contributed a guest post over at Soul Shelter about finding financial balance. This is another meditation on themes we’ve been discussing here at GRS, about exploring the relationship between money and meaning.
This article is about Spare Change
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Your reference to the story of pharmacist from Brewton, Alabama who gave some money to his employees was very heart warming.
However, I do have an issue with conditional gifts. The employees will pay taxes on this money and I do not like the idea of the employer telling them how to spend that money.
Give the money or don’t but don’t put conditions on that gift.
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No, we are not close to hitting bottom. How can anyone still think it’s a good idea to stay in the stock market? Last year when things were looking sort of bad, I ignored “common wisdom” and pulled everything out. I lost a little, but I didn’t lose half of my money.
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“The blog entries this week have been mild, but there’s been a lot going on behind the scenes.”
The suspense is too much! What’s about to happen?
Oh, and to commenter #2′s “How can anyone still think it’s a good idea to stay in the stock market?”
I’m still in the market. And I’m pretty confident it will have come back up by the time I need my money.
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I’ve been working on some big posts, but I’ve also been working with some big names in personal finance, hoping to land some future partnerships that will bring more great content to GRS.
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Oblivious…take a look at some of the Nikkei charts starting around 1991. That’s close to 20 years with no growth. We’re following the same path, but we have no savings and lots of debt. Be careful.
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To questions about the market bottom, I like to reply like this: Why do we need Stock Analysts? To make fortune tellers look good!
The market will do what the market will do. If you know how, you can make money in any market – I made 20% on my money last year. That’s because I didn’t trade based on what I wanted the market to do – I let it show me, and went along with it…
As to comment #1, all gifts come with stipulations – it’s just whether they are spoken or not.
“Here. Enjoy yourself.”
“This is to pay your bills.”
etc.
If not, it can actually create some stress as the recipient tries to use it in a way that supports the giver without actually knowing what the giver wanted. There’s two chapters on this topic in The Seven Laws of Money – a somewhat ‘hippie’ view on finances. But don’t take my word for it, look back at the last time you gave or received money, and the talk around it. If there wasn’t some discussion on how to use it, was there some confusion or pressure for the receiver?
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Have you heard of Tip Jar, google powered service providing money saving tips. http://moderator.appspot.com/#16/e=3cfc
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That was a great story of the pharmacist in Alabama – even better would have been for him to hand out gold dollar coins. You never see those in circulation!
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I also appreciated the story about the pharmacist.
On the bottom of the market, emotions are running high. I get it. In my experience though, especially in times like these, I really try to keep them in check.
Nobody knows what the market is going to do. While the economy is nothing short of real disaster, nobody can call the bottom. My approach is, for my 10 year (plus) money, I’m not going to worry about this because at this moment, all that matters is what the market is going to do over the next 10 years. It doesn’t matter what’s happened all ready because I can’t change that.
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The story about the pharmacist reminded me of when I was in college. Our student bookstore used only crisp, new one dollar bills for textbook buyback. Students would sell their books then go do their weekly grocery shopping or Christmas shopping and pay entirely with one dollar bills. It was always a good reminder of the importance of the students to our small community.
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I second ObliviousInvestor. Never, never buy a stock — or by extension, into the market — while it is still falling. Especially when, as now, there’s no reason to believe there will be a turnaround any time soon. Wait for it to bottom out and then show consistent gains. You’ll buy higher than the absolute bottom, but not as high as you will when it’s still falling.
My 401k has about 10 options for funds. Money that was previously invested stayed put in stock funds, but all new contributions are going into the “wealth preservation” bond fund, whose portfolio right now is about 85% cash, the rest in T Bills and municipal bonds. When (if) the stock market turns around, I’ll move those funds back into the equities funds.
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Eh…I didn’t say that, heh.
Quite in fact, I’m definitely buying while the market is falling. And I have absolutely no qualms about it.
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I’m not buying anything in the stock market until we start seeing job growth, not decline. There are massive amounts of layoffs happening around me. The money that I would be putting in the market is needed elsewhere. I never put into the market what I wouldn’t be willing to lose. I need that money in my immediate funds right now. I’m still contributing to my IRA and 401K. The funds are allocated to government money markets. I am not a professional analyst – I have no clue which companies are healthy and which aren’t. Even my broad market index funds are way off – that’s not a good sign.
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Your contributed post to Soul Shelter about finding financial balance should have been on this site. I think many are still curious as to your thoughts about the third stage of personal finance. I did like your find on the balanced money formula, because it’s something I’ve been trying to do myself but still tweaking it more. Again thanks for that guest post at Soul Shelter.
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