CoffeeCents

1
CoffeeCents

• Part 1 Being Simple

2
Motivation

• Frugality is misunderstood
• For instance, in a recent Washington Post column
  on haggling, I was told by many commentators that
  Since I earn good money I shouldnt care about
  the prices Im paying
• WHAT?!

3
Motivation

• What is frugality?
• Minimizing Expenditures
• Maximizing What You Get
• This could mean price-comparison shopping for the
  cheapest item
• Or it could mean buying an expensive item with
  greater durability
• Frugality puts your money to work for you.
• It can also be a creative spark

4
Motivation

• What is Net Worth?
• Definition 1 Assets minus liabilities
• Very bland. Tough to Calculate
• Not very personal finance-y
• Definition 2 Good Habits Bad Habits
• Who said this? Ben Franklin
• Sums up what a SMART Strategy will help
• Applies to personal finance, business finance,
  life in general.

5
Motivation

• Bob Durst was the Casper College custodian in the
  blue jump suit and bow tie that every student,
  staff member and instructor recognized. Hed
  sometimes reach into his own pocket to help out a
  student in need with 10 or 20. When he retired
  in 2007 at the age of 86 after 27 years of
  driving his roller and paint brush touched-up
  Chevy Caprice to work every day, a classified
  staff award was named in his honor. He never
  took vacation, remembered Sharon Bell, Casper
  College Human Resources Director. I dont need
  to have one, give them to somebody else, he
  would say.
• When Durst died on January 20, the World War II
  Navy veteran who lost his right eye during his
  military service, left his entire estate to the
  college. The unrestricted gift totaled
  1,074,600.

6
Why CoffeeCents?

• Coffeehouses are uniquely suited to
  conversations. Money is a taboo subject to
  discuss (unless youre a personal finance
  blogger). It is noted that
• Youll learn more by talking about budgeting,
  financing, with others, hearing their ideas,
  successes, failures, than listening to one boring
  ole economist.

7
Boring Economic Facts

• New York Times 2005 Half of families in the top
  20 of Households shifted down the distribution
  between 1988 and 1998, a time of economic
  expansion.
• While wealth is correlated across generations,
  70 of the correlation was due to hard work and
  savings.

8
Simple Budgeting (Day to Day)

• Online Budgeting tools
• http//www.Mint.com (free)
• http//www/wesabe.com (free!)
• https//www.budgetpulse.com (free!)
• BudgetPulses HQ is in Vienna, Virginia
• (Support your local industry)
• http//www.pearbudget.com (3 dollars a month)
• And of course Quicken

9
Simple Budgeting (Day to Day)

• I-Phone Apps
• Compare and Convert (6 Pack or Liter?)
• RedLaser (Price Comparison Shopping) 1.99
• ShopSavvy (Same as RedLaser but free)
• Wesabe and Rudder are on the Iphone

10
Simple Budgeting (Day to Day)

• Of course, you can also build your own budgeting
  tool in Excel or Access
• A few years ago I shared my Excel Budgeting Tool
  at GetRichSlowly.Org
• Its still there. Maybe I should update it?
• http//tinyurl.com/2qx4eu
• There are many ways to track your finances.
• Do whatever develops the good habit

11
A Simple Budget

• From Liz Pulliam Weston
• A good initial budget that can be made more
  complex later.
• Starting from a simple base will make it more
  likely youll stick with it. This is a
  psychological trick. Complex plans, budgets etc,
  while more robust and realistic, are also more
  daunting and stressful.

12
A Simple Budget

• 60 to Committed Expenses such as taxes,
  clothing, basic living expenses, insurance,
  charity (including tithe), and regular bills
  (including things like cable).
• 10 to Retirement.
• 10 to Irregular Expenses such as vacations,
  major repair bills, new appliances, etc.
• 10 to Long-Term Savings/Debt money set aside
  for car purchases, home renovations, or to pay
  down substantial debt loads.
• 10 for Fun Money to be used for dining out,
  hobbies, indulgences, etc.
• http//tinyurl.com/pwz56

13
A Simple Budget

• It is very difficult to find yourself in a bad
  spot if this condition holds.
• What you earn gt What you spend
• You NEED a budget

14
Simply Saving

• Latte a Day
• Margarita Millionaire
• Whats the commonality?
• Small change today big change tomorrow
• The power of Compounding
• What can be substituted?
• What can you do yourself?

15
Simply Saving 2

• Helpful Links
• http//www.billshrink.com/ (find cheaper
  services)
• http//www.truecar.com/ (find the best price for
  a car)
• http//portfoliomonkey.com (More Important in
  Session 3)
• Most Importantly, Saving is prioritized first.

16
Simple Information

• Compounding
• http//www.fool.co.uk/Your-Money/guides/the-miracl
  e-of-compound-returns.aspx
• http//www.mindyourfinances.com/money-management/s
  avings/081104-04
• Consumer Action Handbook
• http//www.consumeraction.gov/

17
Simple Information

• Guide to ROTH IRAs
• http//www.getrichslowly.org/The20GRS20Guide20t
  o20Roth20IRAs.pdf
• Transparent Investing
• http//www.transparentinvesting.com/uploads/wholes
  tory.pdf
• Consumer Action Handbook
• http//www.consumeraction.gov/

18
Why Have a Simple Plan?

• Avoid lifestyle inflation
• Well talk about this in session 3
• http//www.getrichslowly.org/blog/2006/12/27/how-t
  o-protect-yourself-from-lifestyle-inflation/
• Avoid workplace inflation

19
Application Your Venture

• Simplify your venture idea
• Note, this works for savings goals, retirement
  goals, job goals, etc, just modify the words.
• 1)What is your product?
• 2)Who is your target consumer?
• 3)How do you get your product to your target?
• 4)What does your product provide your customer?
• 5)Do you want to make a profit? (or non-profit?)

20
Application Your Venture

• Simplify your venture idea
• 1) Personal Finance Education
• 2) 20-somethings
• 3) Sessions at Local Coffeehouses
• 4) Improve Personal Financial Awareness
• 5) Non-Profit

21
Application Your Venture

• What is Coffeecents?
• A non-profit organization encouraging personal
  finance discussion targeting young adults through
  partnerships between personal finance bloggers
  and local coffee shops.

22
Application Your Venture

• Budget your venture simply
• What you absolutely need to start
• What you want to start
• What you can do yourself
• Can you scale it up over time?
• Define success

23
Inspiring Works

• Thomas J Stanley Millionaire Next Door
• This is an actual picture of Warren Buffetts
  house
• Timothy Ferriss 4-Hour Work Week
• Ramit Sethi I Will Teach You To Be Rich