The Writers Coin

I have slowly but surely crept up my RSS reader subscription all the way up to around 100 readers and in the process have discovered Google Reader—it’s the best part of feeds and how they work, in my opinion.

I have my own parameters about when I add a feed to my reader: a consistent amount of interesting posts, a voice I like, and a little spice.

So I’m curious what gets people excited about The Writer’s Coin. Please leave your comments here on this post or email me at thewriter [at] thewriterscoin dot com.

Thanks for subscribing and if you have anything you like or don’t like, now’s the time to speak up!

Trent had a reader ask him a question that got me thinking quite a bit the other day. Basically, Wayward wants to know if it’s OK to stop contributing to his 401(k) and if he should put the money he was previously putting into it into a different account.

The problem? His company, as are many others during these difficult times, is no longer offering their employees any matching. That means you’re not getting the biggest perk of all of a 401(k): free money.

Matching? We Don’t Need No Stinkin’ Matching!

Umm, yes you do. As frequent readers know, I’m not a big fan of 401(k) providers—I think most of them suck. Why? Let me count the ways:

• Limited Options: Their menu is very limited and if you want to lobby for change, it will take a long time to get it done—if it happens at all. Think of as being in jail and complaining about the food—what are you gonna do but eat what they serve you?
• High Expenses: Why wouldn’t they charge you more? They’re the only game in town, so they can charge whatever they want because they know you want to get your hands on that “free money.” It’s kind of like the ridiculous prices of candy and soda at the movies. There’s no competition so they can charge whatever they want.

Something about that whole attitude of “hey, we’ve got you where we want you so we’re gonna fleece you” just doesn’t sit well with me. So if I were in Wayward’s shoes, here’s what I would do:

• Open a Roth IRA: Trent also recommended going this route, and I think it’s a no-brainer. Having a Roth IRA and a 401(k) gives you added flexibility (as this “oh so early” post of mine illustrates—I’ve come a long way) when it comes time to retire. I have mine in several places, but the best place to start is Vanguard: cheap index funds baby.
• Stop contributing as much: Wayward was originally contributing 20% of his paycheck to his 401(k), to which I say “Whoa!” That’s great that you can afford to set aside that much of your paycheck, but with the matching gone, I would seriously cut this back. How much? How about trying to fully fund the Roth you just opened. That’s $5,000 a year. If you can fully fund it and leave the rest in your 401(k), you are home free.
• Check your allocation: Now that you have a Roth, look at the funds you want to own in your entire retirement portfolio and see where they are cheapest. If you you can get the same fund in your Roth and your 401(k), odds are it’ll be cheaper over at Vanguard than with your 401(k) provider, so pick the one that is ripping you off “the least” and buy that one with in your 401(k). What you’re trying to do here is minimize your fees.

Am I missing any other tips for people in this situation? I know that the drumbeat out there is to contribute as much as you can to your 401(k), but under certain circumstances it’s worth considering the other options that are out there.

Oh and if you still get matching I would still push for opening the Roth—flexibility is a beautiful thing.

So I finally read the “new” biography on Warren Buffett—The Snowball—all 838 pages of it. Why would I wade through that many pages to read about some guy that  picks stocks? Well, because he’s probably the greatest investor any of us has ever seen.

That and another book: Buffett: The Making of an American Capitalist. That book was my “intro” to Buffett—it’s a fantastic book that gives you a great idea of what the man is like and how his mind works.

But if Buffett is the appetizer, The Snowball is the main course. Not only because it’s the first authorized biography on the Oracle of Omaha, but because it goes into great detail on all of the topics that the first book touched on.

A LOT of detail. Like all the crazy, Tom Sawyer schemes Buffett and his friends had to make money when they were young. It’s a fun read, though there were topics that I thought were just “kind of interesting,” and the details on those kind of slowed the read down a little.

I already gave a preview of the book and discussed Buffett’s opinion on the estate tax (or death tax).

So instead of going chapter for chapter, which would take a few thousand words, I’m just going to highlight some of the most interesting parts of the book. As Ramit would say, “things you would talk about at a cocktail party.”

So if you can’t make your way through this tome of all things Buffett, here are some good nuggets, as per my opinion:

• After staying away from foreign stocks for pretty much his whole life, Buffett discovers Korean stocks in 2004. Since they have a totally different accounting system over there, he had to teach himself that new system. Which he did. And then he mastered it and started scooping up cheap companies.
• When he announced he would be leaving all of his money without leaving behind a Warren Buffett foundation or a hospital/university wing named after him, it not only made history, but he set a precedent for other philanthropists about how to give their money away.
• He was famously anti-computers and anti-Internet because he couldn’t understand them. Yet he still continued to beat the market without having minute-by-minute information about the market. Why? Because Buffett invests for the long term, he doesn’t care what the market does from one day to the next, so he doesn’t need to know. But his obsession for bridge eventually got him plugged into the net: he would play online for hours at a time.
• Big pimpin’. I know, it’s weird, but Warren Buffett is/was not a traditional one-woman man. He’s got his quirks, and one of them is that he needs more than one woman in his life. The way he grew up and the way his mother treated her kids may have had something to do with it, but the end result is that he lived a life of a rapper for a little while there. Except without the excessive spending and the drugs. And the rap—there was no rap.
• The Long Term Capital Management debacle—Buffett wanted to make that deal. It’s just that no one could get a hold of him because he was trying to use a satellite phone in Yellowstone park that wasn’t working properly. So he missed the deal.
• Buffett is NOT a fan of stock options. He wants to reward those that get good results, but boards are notorious for rewarding the most mediocre performances. He also went on a crusade to change the way stock options were accounted for—they didn’t “cost” anything right away, which made the books look that much better. This cost him some relationships, since all his friends were filthy rich, and this hit them right in the gut. But he still stuck to his guns.
• In one sentence, the essence of Buffett’s success: “Buffett’s real brilliance was not just to spot bargains (though he certainly had done plenty of that) but in having created, over many years, a company that made bargains out of fairly priced businesses.”
• Check out what his buddy Charlie Munger said in 2003: “I’ll be amazed if we don’t have some kind of significant blowup in the next five to ten years.” Boom. He called it.
  
• He’s a man of routine: there’s a part in there where they explain how he eats the same lunch every day, day in and day out. When I read that part I was like “Me too!” Sad, but true.
• It’s happened many times over the course of his life: people start to question his ability to make money because “times have changed” or because “Buffett hasn’t adapted.” But every time he’s come through and his reputation has grown more and more because of it.
• He was pretty much set to retire way before he was an investing rock star, but he couldn’t stay away. An obsessive person like this? No way he could just walk away.
• The Ovarian Lottery: VERY big deal to Warren. He repeats this a lot: he was incredibly lucky to be born in the USA with the skill-set he was born with. When he was in China he was watching these men pulling tugboats and he realized that any one of them might be “smarter” or “savvier” than him, but it wouldn’t matter because they were born in a poor town with no prospects. Buffett feels incredible lucky and he hates it when people claim that they “did it on their own.” Luck is always a factor, right from the moment we come out of the womb.
• His advice to college students: “The purpose of life is to be loved by as many people as possible among those you want to have love you.” Pretty deep from a man considered to have the emotions of a robot. A robot with no emotions, that is.
• On corporate misbehaving: Buffett feels strongly about doing “the right thing” and not cheating anyone, to the point that it almost got him in trouble with a couple deals he made because the SEC couldn’t understand why he overpaid for certain deals. He claimed it was “the right thing to do,” and they wouldn’t believe that. Anyway, his philosophy on the “right” thing is to make decisions as if they were going to be plastered all over the front page the next day—everyone will find out about them. If it wouldn’t bother you to have your moves published like that, then go for it. I like that…

If you have the slightest bit of interest in knowing more about Warren Buffett, you have two choices: you read Buffett: The Making of an American Capitalist or you read The Snowball. If you want the Cliff Notes version, read the former, if you want every little detail and more of the recent stuff he’s done, go for the latter. Either way, you won’t be disappointed.

by Shiny Things

In other words, would I accept a substantial chunk of money if some angel investor came down to earth and offered it to me?

You’re damn right I would. Last year was my first year as a full-blown blogger that posted regularly (almost every day…and for a while at the beginning three times a day), participated in carnivals, and commented on other blogs.

The stuff all bloggers do.

So I decided to do a little roundup of 08 to see how my numbers stack up. This being a personal finance site, I  figured I would share the “P&L” behind the site.

In other words (I seem to dig this phrase right now), how much did I make and how much did I spend on this site? And after all that, does it make sense to continue?

I Spent

• Hosting: $69.40. I had a coupon at the time so I saved quite a bit of money on this with Dreamhost. They also threw in the domain for free. This year’s bill, however, was almost twice that. Sheesh.

I Made

• Adsense: This picked up as the year went by, so hopefully 2009 will be better. Especially when you read about other bloggers that are disappointed with their $2000/month income. Jeez.
• ING Referrals: Love promoting ING because when you use something and really believe in it, it’s a cinch.
• Online Stuff: This is stuff like MoneyExchange that I found out about from networking with other sites and such. Just one-time deals.
• Amazon.com: This is from people clicking on my Amazon links and eventually buying something. It ain’t much, but it’s something.
• Other Ad Revenue: Ads on the site, other deals, etc. Not much but in the future it could add up to more.
• TOTAL: $347.07

Now, it may seem like I came out OK, but I really didn’t. One thing I’m not counting here is all the time I put into the site. I would estimate it at around 400 hours for the whole year. That means I’m earning around 70 cents/hour, which is NOT good.

On the flip side, I’m also not counting the one huge thing that this site has gotten me: my new job. I don’t want to get into numbers, but it got me out of a job I wasn’t happy with and it boosted my salary by a very healthy amount (around 21%). So that makes it a little easier to swallow the 70 cents/hour number.

The original reason for this post was to find out if running this site was “worth it” financially. The numbers can be fudged any number of ways, but I’m really excited to see what I can do with the site in 2009. Besides, I already paid my hosting dues for ’09 so I gotta make that money back now.

If someone came along and offered me a nice amount of money (oh, say, around $100,000) that would be nice too. And don’t listen to what sites like these say….their estimates are way off.

Any takers?

Just kidding…

Or am I?

PS: BripBlap was kind enough to send me the link (via twitter) to the site that computes how much your blog is worth. It says I am worth 45k. Not bad! For those that don’t “get” Twitter, here’s a great example of how it can help you out.