Being broke sucks

It’s been a loooong time since the Beard family has lived “paycheck-to-paycheck.” I’ve pretty much always maintained at least $5k in savings somewhere. There have been times when we faced a big expense that we weren’t quite prepared for, but we always at least had credit to cover those shortfalls.

Basically, I’ve always had money or easy access to money, so I’ve never fretted over how to pay for my next meal. Until last week. Last week I faced my first real experience with being broke, and let me tell you: being broke sucks! Continue reading “Being broke sucks”

Being broke sucks

Surprise! Making money with a blog is hard

Last month I reported my attempts to make a little money with this blog. I had some success, generating what I thought was a little more than $150 in revenue. More importantly, my little experiment showed that the income reports I was reading from some of the bigger personal finance bloggers were not out of the realm of realistic. Those folks are probably telling the truth. Today, let’s look at the second month were I really upped my game. Can I make money with a blog? Continue reading “Surprise! Making money with a blog is hard”

Surprise! Making money with a blog is hard

Dunning-Kruger: Reading blogs doesn’t make you smart

I keep telling you that I’m a dumbass. However, my ability to recognize that I don’t know what the hell I’m talking about probably makes me more of an expert than most of the people on the internet. Basically, I know very little about investing money. Chances are, you know very little, too. That doesn’t keep us from talking about it as if we did know what in the hell we were doing.

Today, I want to share with you the story of the “smart” student. This is a story about that student you know from one of your past classes that “knew” everything already, loudly trumpeted that “fact,” and basically pissed everyone off while demonstrating a complete lack of mastery at every moment.

After this little story, I want to tell you how to be careful out there in the big bloggy world. Because the entire internet is made up of people that were once those students.

As a professional educator, I get to deal with these douche-bags every day. As a professional educator of educators, I also know a little about the psychology of these dudes’ thinking. (By the way, they’re almost always dudes, at least in the sciences. I don’t know why, and that’s not our topic. Women are probably just fundamentally smarter and less prone to wildly overestimating their own abilities for some reason.)

So, today we’ll look at Dunning-Kruger, or what pop psychologist Venkatesh Rao calls the Tragicomic Exasperation of Expertise. I want to put you on the look-out for thinking you know enough to evaluate a complicated financial play. In fact, once you start feeling dumb again, you know you’re on the path to enlightenment! Embrace your dumbness, because you’ll avoid doing stupid shit.

I also want to take the opportunity to kick peer-to-peer lending while its down, and hopefully tie the current mess Lending Club finds itself in to the personal finance blog world, Dunning-Kruger, and that annoying kid you knew from high school. Why do personal finance bloggers keep pumping up investing opportunities like Lending Club, Prosper, and PeerStreet when their actual expertise lies in software development and riding bikes?

Buckle up, because it’s going to be a wild ride. Continue reading “Dunning-Kruger: Reading blogs doesn’t make you smart”

Dunning-Kruger: Reading blogs doesn’t make you smart

Lease buy out? An exercise in problem framing.

I have an important financial decision to make soon, and I thought I would run it by the Beards & Money readers to make sure I’m not thinking stupid. The best way to avoid costly money mistakes is to convince others why before you buy. Basically, I need to figure out whether or not I should exercise the lease buy out for our fancy newer car.

Right now, the Beard family has two cars. A nearly new 2013 sedan with 22,000 miles and an older 2006 station wagony SUV-like sorta thing with 70,000 miles. The newer car is leased with the term expiring in September. The residual is $12,500. The older car is owned outright and is worth about $6,000 on the private market.

We have decided that we are going to become a one-car family, and we have to decide which car needs to go. At first, it seemed easy. Turn in the leased car to the dealer in September and that’s that.

But, I’m on a roll with writing about this whole money expert thing. I’ve written about how the smart folks look at money issues from all kinds of directions, instead of getting stuck on one framing of the situation.

Ty at Get Rich Quick’ish recently discussed one practical application of expanding your problem framings when he questioned the bromide that paying off debt should be job number one.

It’s my turn to give you a glimpse of my Ivory Tower secret decoder ring, and show you an honest-to-goodness problem that needs solving. My problem. And how I’m trying to think like a money expert by thinking about all the possible ways to frame the problem.

Should I buy out the lease for $12,500 and sell the older car, or just turn in the leased car and rock the paid-for older car? Continue reading “Lease buy out? An exercise in problem framing.”

Lease buy out? An exercise in problem framing.

Epistemological Resources and thinking like a money expert

Welcome to Part II of the series I’m calling “Posts that make me look smart.” Or, maybe we should call it “Posts that teach you fancy words that can help you look smart at a party.” We’re going to talk about Epistemological Resources and how a money expert uses them differently from your sucky money self.

Now, imagine yourself dropping the term Epistemological Resources at your next dinner party. Everyone will think you’re some kind of brainy-pants. Or a self-important asshole. Either way, they’ll think your something.

Previously, we looked at the smart-sounding concept of disequillibrium and how we, as humans, go about the process of learning new, more complicated stuff. In that post, I explained why you suck at money and the cognitive science that points in the direction of how to stop sucking at money.

Today, we’ll look at the equally smart sounding idea of epistemological resources and how a money expert cognitively approaches ideas in a way that is fundamentally different from how you approach them.

Specifically, I’m going to tell you about the approaches people take towards what they “know” and the processes people go through to create new knowledge for themselves. We’ll do this by looking at the research behind how experts solve problems and how “novices” solve problems.

And, since this is Beards & Money, we’ll link these concepts to money and completely disregard the entire “beards” thing. If we’re being honest, blogging about beards is hella boring while money is hella exciting. Continue reading “Epistemological Resources and thinking like a money expert”

Epistemological Resources and thinking like a money expert

Can you make money from a blog?

Today concludes my first month with this silly little blog about beards and money. As I’ve mentioned before, I haven’t really been too interested in making money with the blog. However, I am a scientist and ultimately a very curious creature. So I set out to answer a little research question: Can you make money from a blog? I also had a side-goal of answering another pressing question: Is Sam the Financial Samurai a lying asshole? I’ve got the data and I’ve done the analysis. My conclusions are beard-tastic and without fault. Yup. It’s time for a blog post about blogging. Continue reading “Can you make money from a blog?”

Can you make money from a blog?

I love you, honey. If I die, you’ll be rich.

My wife and I were recently talking about what she should do with the proceeds from my life insurance if I were to die tomorrow. We’re in Europe right now, and everyone is pretty on edge about civilian-targeted terrorist attacks. I realized that I have been building up a pile of what I call “I love you money” for years, but I’ve never put together a plan for my wife to act upon in the unfortunate even that I die early.

In this post, I am laying out my plan for my wife. This post will provide a framework for her to follow that will have her and my children’s needs covered for the rest of her life, and hopefully longer.

I want to also write a little about what “I love you money” is, and why it’s important. If you don’t have a plan to leave behind buckets full of “I love you money,” then hopefully this post will get you off of your ass and get your loved ones protected. Continue reading “I love you, honey. If I die, you’ll be rich.”

I love you, honey. If I die, you’ll be rich.

Should I max out my contributions to pre-tax retirement plans? Even if I want to retire early?

You have decided that you will grow a terminal beard because you want to be a supreme bad-ass. At the same time, you realize that every dollar you are able to save acts as a bad-ass multiplier, pushing you into the realm of the most bad-ass bearders of the world. You plan to multiply your bad-assness so much, that you realize that it would be very easy for you to retire in 10 years, by around your 45th birthday.

What if someone came by and told you that you could chop a couple of years off of your early retirement plan without having to save or earn one extra penny? By taking advantage of this one little idea, you could set your wealth generation on autopilot and protect your financial plan from that most devious foe: yourself. You could also stick it to the man by ensuring that you pay almost no taxes now, and even less when you retire. Sound good? If so, then all you have to do is pile every cent that you can into maxing out every pre-tax retirement vehicle you have available to you. Continue reading “Should I max out my contributions to pre-tax retirement plans? Even if I want to retire early?”

Should I max out my contributions to pre-tax retirement plans? Even if I want to retire early?

A mathematical model for beard growth and awesomeness

It’s a general rule that the longer you grow your beard, the more awesome you become. Does beard growth really lead to increased awesomeness? As a scientist by training, it is my scientific duty to poke and prod at so-called “rules of thumb” to ascertain the true reality. Do beards really grow half an inch per month? Do you actually get more awesome? How much more awesome do you get? Today, I’m going to present to you a mathematical model for beard growth and its correlation with personal awesomeness. This is some pretty serious stuff. Furthermore, since this is Beards & Money, I’m going to show you the parallels to net-worth growth and feelings of awesomeness. Continue reading “A mathematical model for beard growth and awesomeness”

A mathematical model for beard growth and awesomeness

How to become a millionaire on a teacher’s salary in 10 years

The Glorious Beard family has a long-term goal of reaching a million dollar net worth within the next ten years. I’m going to be a millionaire on a teacher’s salary. If you are going to have such a big and crazy goal, then you really have to have one hell of a solid plan. How do you come up with a plan for something so ridiculous sounding? Your first step is to absolutely, positively, 100% believe in your mind that your crazy-ass goal is possible. If you start there, then your mind can start working on the problem in the background. Eventually, out pops a basic idea, and then you’re off to the races refining that idea until you have a plan to achieve your crazy goal.

My wife calls me “The Weasel” because of my incredible ability to “weasel” the things she and I want. As one example, she wanted to travel around Europe when we retired. I told her that idea was stupid, and that we needed to travel around Europe RIGHT NOW! So I put that goal in my mind without any idea how we would accomplish it. After a while, the idea formed, and then the plan, and then the execution of the plan, and now we are traveling around Europe for free and getting paid for the privilege.

The most recent goal I have been working on is the million dollar goal. How can we become millionaires by our mid-40s with a single teacher’s salary? I’m excited to tell you that we have a plan, and the math works. Continue reading “How to become a millionaire on a teacher’s salary in 10 years”

How to become a millionaire on a teacher’s salary in 10 years