April 2011


Yesterday was my birthday, and it was a fantastic, joyful day that filled me with delight. It wasn’t because I got a bunch of presents or cake or anything like that (although last weekend I did have a great time celebrating in such fashion with my family in North Carolina too). In fact, I spent most of the day in the office working. The reason I am so happy is that so many of my friends and family sent me birthday greetings from all over the world! I know it seems like a small thing just to post on someone’s facebook wall or send them a text message, but those small gestures mean a lot to me.  I want to say THANK YOU to all of you near and far for being my friends. Whether I met you only for a weekend while traveling or have known you since I was a little child, your kindness, inspiration, and the new perspectives you have given me are what make me glad to be alive. If a good friend is more valuable than gold, then today I feel like the richest man in the world.

[En Espanol] Ayer fue mi cumpleanos, y fue un dia fantastico con mucho felicidades, que me lleno con gusto. No fue porque yo recibi muchos regalos, ni pastel, ni algo asi (aunque la fin de semana pasada me diverti mucho celebrando con ellas cosas con mi familia en Carolina del Norte). En serio, yo pasaba la mayoria del dia trabajando en la oficina. El razon que estoy tan feliz es porque tantos amigos y familia me mandaron saludos desde muchos paises y lugares diversos del mundo! Se que parece una cosa de poca importancia poner algo en el “muro” del facebook o mandar un mensaje por text, pero esas cosas pequenitas significan mucho a mi. Quiero decir GRACIAS a todos Uds. cerca y lejos por ser mis amigos. Si te conoci solo por una fin de semana cuando viajando, o si te he conocido desde cuando eramos ninos, tu amabilidad, inspiracion, y las vistas nuevas Uds. me han ofrecidos son los que me dan feliz vivir. Si un amigo verdadero o amiga verdadera vale mas que oro, entonces hoy me siento como el hombre mas rico del mundo.

[Em Portugues] Ontem foi o meu aniversario, e foi um dia fantastico com muitos felicidades que me cheio com gosto. Nao foi porque eu recebi muitos regalos, nem bolo, nem algo assim (ainda que a fim de semana passada me divirti muito celebrando de tal forma com minha familha em Carolina do Norte). Em realidade, eu passava a maioria do dia trabalhando no escritorio. O razao que estou tao feliz e porque tantos amigos e familha me mandaram saudacoes desde muitos paizes e lugares diversos do mundo! Sei que parece uma coisa de pequena importancia colocar algo no “muro” do facebook ou mandar um mensagem de text, mas essas coisas pequenas significam muito pra mi. Quero dizer OBRIGADO a todos voces perto e longe por ser meus amigos. Se eu te conheci so por uma fim de semana quando viajando, ou se eu te tenho conhecido desde quando eramos criancas, teu amabilidade, inspiracao, e as vistas novas voces me tem ofrecidos sao os que me dar feliz viver. Se um amigo verdadeiro ou amiga verdadeira vale mais que ouro, entao hoje me sinto como o homem mais rico do mundo.

[Sa Tagalog] Kahapon ay ang aking kaarawan, at ito ay isang mabuting, masayang araw na napuno ako sa tuwa. Ito ay hindi dahil ibigay ng mga regalo o cake o anumang bagay tulad na (bagaman katapusan ng linggo ko ay may isang mahusay na oras pakikisalu-salo sa tulad ng paraan kasama ang aking pamilya sa North Carolina pa rin). Sa katunayan, nagtrabaho lang ako sa opisina. Ang dahilan ako kaya masaya ay na kaya marami sa aking mga kaibigan at pamilya na ipinadala sa akin na pagbati ng kaarawan mula sa buong mundo! Alam ko ito tila tulad ng isang maliit na bagay lang sa post sa facebook wall ng isang tao o ipadala ang isang text na mensahe, ngunit ang mga maliliit na gestures ibig sabihin ng marami sa akin. Gusto kong sabihin SALAMAT sa lahat ng kayo malapit at malayo para sa pagiging mga kaibigan ko. Kung makilala kita lamang para sa isang katapusan ng linggo habang naglalakbay o may kilala kita mula sa kailan ako ay isang maliit na bata, ang inyong kabaitan, inspirasyon, at ang mga bagong perspectives sa iyo ay may ibinigay sa akin ay kung ano gumawa ako masaya mabuhay. Kung ang isang mabuting kaibigan ay mas mahalaga kaysa sa ginto, tapos ngayon pakiramdam ko ang pinakamayamang tao sa mundo.

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I recently had a conversation with two friends from work about personal finance and investing. Having read many articles about the precarious state of most American families’ finances, I am trying to discipline myself to spend less than I earn and plan for the future. Here’s my basic strategy:

  1. Build up “emergency savings” cash in a regular savings account, enough to pay all bills for 3-6 months. Bankrate is a good tool to compare offerings by online banks.
  2. Pay off debt, especially student loans since they are the only ones that can’t be discharged by personal bankruptcy.
  3. Put some of each paycheck into a roth IRA (can fund it up to $5000 per year of earned income)
  4. Within the roth IRA, buy index funds once every 2-3 months (and almost never sell, to avoid commission fees) to maintain asset allocation based roughly on the following formula:
  • 30% domestic (US) stocks, such as SPY
  • 15% real estate investment trusts, such as VNQ
  • 15% international developed market stocks (Europe, Japan), such as VEA
  • 12.5% government bonds, such as TLT
  • 12.5% inflation protected government bonds, such as TIP
  • 10% emerging market stocks (Brazil, China, etc), such as VWO
  • 5% commodities/ individual stocks, such as POT

Any dividends/interest/tax refund/etc gets reinvested in roth as well. I use Scottrade as broker but there are a bunch of other cheap ones too.

The reason I prefer index funds over individual stocks is because the risk is associated with the whole economy, rather than an individual company, and I don’t have the skill to predict which company will go up or down in the future (on the other hand, because the variation in returns is smaller, the potential for large gains is also less). Mutual funds have the same features of diversification, but the reason I don’t like them is because they often have high “management fees”. In the 401(k) you have almost no choice but to put up with such fees, which is why I like the roth IRA better. Here are some more articles that explain the pros and cons of index funds:

http://www.nytimes.com/2009/02/22/your-money/stocks-and-bonds/22stra.html

http://www.nytimes.com/2010/02/06/your-money/stocks-and-bonds/06wealth.html

Vanguard is a company that is well-known for its low-fee funds (example: VWO tracks emerging market equities)

Another example of an exchange-traded index fund (ETF) that tracks the S&P 500 index is SPY.

I also like the “motley fool” site for general personal finance advice.

Finally, here are a couple of counter-perspectives:

http://www.fool.com/investing/general/2010/12/08/does-warren-buffett-really-think-index-funds-are-b.aspx

http://www.investopedia.com/articles/stocks/09/reasons-to-avoid-index-funds.asp