Frugal Chic…or Cheap?

March 8th, 2012

When I was a kid, I was standing in the grocery store check-out line with my Dad when the lady in front of us pulled out a pile of coupons and started handing them to the checker. My dad whispered something to me about having to wait, referring to the woman as a “penny pincher.” It was a harsh label for someone just trying to save money on groceries. But in some cases there is a stigma attached to people dedicated to saving more and spending less–especially those who save at the expense of others or who are afraid to spend money on anything. Here are things that I think define frugal living:

1. Saving is a means to an end. The end could be a trip to France, a $10k emergency fund that will bring you peace of mind, paying off the $3k credit card debt that has been weighing on you, a down-payment on a condo or all of the above.
2. It’s

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We’re Going Down to One Vehicle

February 23rd, 2012

Back in 2008 I wrecked my Jeep and we were forced to become a one car family. My buddy knew a guy who could fix it for cheap you know how those deals go. What was supposed to take about a month quickly deteriorated into 8 months, several yelling matches, and a big headache. Finally, I got my Jeep back in working order.

It was a trying time but it taught us a lot and showed us we could get by with only one car, even when we both worked full-time jobs.

Even if theyre paid off, cars cost more than you think.

Using the [cost of owning a car] equation, the true cost to own and drive our paid off vehicles is around $720/month.

This means owning both cars, even though theyre paid off, costs us roughly $8,650/year.

We only need one car.

Nowadays we both work from home, have no children, and spend most of our time together. Si

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Warren Buffett on Stocks, Bonds and Gold

February 22nd, 2012

In a column in Fortune magazine (see Warren Buffett: Why stocks beat gold and bonds), Warren Buffett explained why he prefers stocks over cash, bonds and gold. It is true that cash does not fluctuate in nominal value but its returns are close to zero after one accounts for inflation and taxes. At todays low yields, he quips that bonds are priced to deliver return-free risk. Buffett also pointed out that despite its stellar recent returns, gold has limited uses and does not produce an income stream. Therefore, he says, he prefers stocks to bonds and gold:

My own preference and you knew this was coming is our third category: investment in productive assets, whether businesses, farms, or real estate.

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Tags: Gold, Warren Buffett

How PPF interest is Calculated ? (Video)

February 13th, 2012

There is a great confusion among investors on how PPF interest is calculated ? Just because a lot of investors dont know this , they have questions like what is the best time to invest in PPF to get maximum interest or Should they invest in lump sum or monthly? . Once you know the procedure and exact method of interest calculation, life will be easy. Let me explain with examples how its done .

To explain in one line PPF interest is calculated monthly on the lowest balance between the end of the 5th day and last day of month, however the total interest in the year is added back to PPF only at the year-end 

Excerpts from Official PPF page

8. I

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Tags: Calculated, Ppf Interest