What’s your definition of wealth?

29 01 2013

It’s very interesting to talk with my coworkers about wealth.  I frequently complain at work about how poor I am, and most of my coworkers think I am an idiot.  They know my salary ($70,000 + travel bonuses) is high and that I am single, and to them that equates to wealth.  However, they are thinking of monthly income and not net worth.

In terms of net worth my value is currently about -17,500$, about to be -18,000$ when my rent check clears.  That’s almost 28,000$ of debt and around 10,000$ in cash/assets (some of which are frozen in retirement accounts). I don’t know about you, but being in the hole almost 20 g’s is not my idea of wealthy. If you’re thinking about people in debt several hundred thousand dollars for a house and cringing, I’m right there with you, but at the very least if worse comes to worse they can sell their house (although if they’re underwater that would really blow) whereas I cannot sell my college education (in the same sense as I can sell a house, technically by working I am selling my college education in a way).

However, net worth is not my definition of wealth.  I’m going to have to go with Robert Kiyosaki in his book Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! and define wealth as the number of months you could live at your current level of spending if you lost your job. For me, that means my wealth is only 2 months, 4 if I stretched it and filed to have my student loans put on hold, longer if I also collected unemployment. But within a year I’d be totally screwed. Once I pay off my debt, my wealth will essentially be infinite, since I have a lot of cousins and I’m sure I could mooch a room or pitch a tent in the back yard in exchange for tutoring/babysitting their kids (only half joking).

My takeaways here are:

  • it doesn’t matter how much money you make, if you spend a penny more than you make per month you will forever be in debt.
  • if your net worth is negative and you have no income streams to pay it off when you lose your job, you’re screwed.
  • having no debt and a wealthy family or a strong community means you can live (frugally) pretty much forever, sans medical events.

So, what’s your definition of wealth?





Money Three Month Challenge

29 01 2013

I recently looked at my finances (last post) and thought, holy crap I’m spending way too much.  So, for the next three months I’m challenging myself to cut my food, shopping, and entertainment budgets to half.  I will do this by cutting back a little each month to give myself time to adjust.

moneychallenge

The stars indicate that for those months I will be using my shopping budget to purchase cooking utensils for Four Hour Chef.  Total spending across all three categories drops from 953$ to 450$, a savings of 503$ per month, or dropping to 53% spending.

This won’t be easy (250$ a month on food is less than 10$ a day), but I am going to go at it with gusto.  With travel for work it actually becomes much easier!





January 2013 Financial Synopsis

25 01 2013

January is winding down and so here is my monthly financial roundup.  I am currently on track to meet my budget for this month, with roughly 125$ to live off of until the end of the month.

spendingjanMy current budget is pretty high at 2000$/month, and obviously looking at it that’s mostly going into Food, Entertainment, and Shopping (953$).  Loosely, my goal is to decrease that 300$ to 500$ per month, but I can meet my financial goals without doing that.

I really have no idea how people are alive, have kids, etc!  I make good money, 70k/year, and I’m not exactly rolling in dough.  After taxes, 500$/month into a Roth IRA, 6% of my paycheck towards my 401k, and my budget, I only have 935$ left over!  That means I have to work 2 months to live 1 month off my savings, or that it would take a year to afford a new economy far.

Loan Outlook

I currently have 27,793.06$ in loan debt.  I set a goal in Mint to pay that off by the end of this year, which will require me to pay 2600$/month for the rest of the year (not January).  That’s 1665$ more per month than I have, which will have to be made up by earning extra money by travelling for work.  This amounts to basically 10 days of travel for work per month, definitely within reach.  Extra travel will help pay off loans faster minimizing interest or going into my emergency fund or into my car fund.

 

 





Three month challenge

23 01 2013

Decided to give myself a three month challenge.  I’ve put on a healthy gut, I’d estimate 15% to 18% body fat on my stomach, certainly not much but enough to have me annoyed.  The main reason behind this gut is travel for work. Can’t commit to my normal work out, difficult to eat slow carb on travel, and I’m too lazy to cook when I actually am at home.  So I think this will be quite the interesting challenge, since so many people complain about not enough time, money, etc to getting in shape/healthy.

My challenge:

  • Return to about a 12% BF ratio.  But ultimately, just look be in good physical shape which shows (anyone want to judge? lol), no need for a six pack.  Giving myself until May 1st.
  • Workout with no weights of any kind.  I will be doing convict conditioning along with other things I’ve learned on my own.  Only tools will be a baseball, basketball, pull up bar, and chairs (or my workout bench).  Oh, and I’ll probably do sprints and burpees as well.
  • I will record time spent working out and keep it to a minimum.  This type of workout is very good for doing while watching TV or doing other tasks at home.
  • A simple diet anyone could adopt, which is pretty cheap.  Will have to iron this out over the weekend, but it will be slow carb
  • Do this all while traveling sporadically for work.

Some advantages I already have are:

  • I don’t have any strong cravings for food/have done slow carb before
  • I am already in reasonably good shape (I estimate my max deadlift to be about 280 pounds and max overhead press about 125 right now)
  • I already know what to expect.  This is a powerful advantage.

Because of these advantages, if you wanted to replicate results you should expect to take a full year, not just nine months.  Dedicate 3 months to diet alone, 3 months to working up to a decent workout routine, and give yourself an extra 3 months to execute.  I’m going for just 3 months straight of execution.

I will track my workouts here: https://docs.google.com/spreadsheet/ccc?key=0AtSXSNbY2r9HdFRaZHV4emlNYUZVZXVqRldIRTM1a2c

I will post a general idea of what I’ve been eating here on my blog periodically.

Of course there will be a million people who say this is too easy, or that I have an awesome metabolism, or a million other things.  But this is a challenge for myself, so who cares what they think?

 





The implications of teleportation

22 01 2013

When preparing to interview at my current company, I googled “interesting interview questions” and one that I came across was, “what would happen in the short and long term for society if teleportation were discovered?”  I randomly remembered this (because a friend posted an article by a blogger exploring the implications of self driving cars, so not too random), and though it would be fun to explore because I feel I won’t fall asleep for a while.

This question, much like zombies, cannot be explored without setting some ground rules.  For example, if people could teleport like in Jumper, the implications short and long term are simple: widespread crime and the death of the human race or the breaking of the human race into groups of familial/communal groups.  So since that would be no fun to explore as a positive technology, let’s make some assumptions:

  • Teleportation requires a pad to send and receive, meaning things must physically be placed on them.
  • Teleportation requires a small but finite time to accomplish.
  • Teleportation pads have traceable transactions, meaning using them for crime would require great ingenuity.
  • Teleportation obeys the speed of light limit, required or a discussion of the physics becomes too abstract.

Now this is a decently defined and explorable situation (wow I’m such an engineer).  Thinking a bit further, there is another major assumption which we must make before exploring the idea.

  • Teleportation costs some amount of electricity.  Based on the cost, the implications will be far different.  At a cost of pennies we could look at interstellar travel, amazon becoming 99% of the economy etc.  At the energy cost of a nuclear bomb, the implications are much more different.  For fun let’s assume it costs about the amount of energy to light a light bulb for 1 hour to transport any item which fits on the pad anywhere in the universe.  Spacetime is complicated, so let’s just assume the universe operates only under newton’s principles.

Already we can see  I must make numerous assumptions to define the problem and have a meaningful discussion of the subject, and each assumption I make cuts down on the implications or at least alters them.

So in the short term, cars will become completely useless except for racing and transportation from transporter pads to local areas or vice versa.  Every industry will be affected.  Amazon can deliver things to your house, so can a farmer.  Wars will be completely different because personnel can be moved instantly and the logistics of supplying an army will be completely different.  An inability to block transporter pads will mean the entire world burns as one country sends military through pads in enemy countries, so let’s assume transporters have some sort of screening.

But then, when thinking of war, we must think if there is a size limit to teleportation, for transprorting a man or a tank will surely change the implications for war.  And while addressing the idea of size, we must address mass.  Doesn’t mass decrease as a body increases toward the speed of light or something?  Anyway, there are many short term implications, but I am getting tired so let’s move to some long term.

Space travel will be revolutionized.  Imagine sending a probe with a transporter to other planets, and able to send personnel and equipment.  Astronauts could sleep at home.  Probes could be sent to other solar systems, as fuel could be transported to them mid flight to increase their speed close to the speed of light.  Althogh the implications of magically adding mass to a space ship again, mess with the physics of the situation.

If you transport something to a transporter pad, does it have the same velocity as the pad it came from or the pad it transported to.  If you sent something to a space ship and it wasn’t going the same exact velocity as the landing pad, it would basically be a bullet.  Even on Earth that would be true as the Earth is moving relative to the sun as well as the center of the universe.  So eventually the implications get too bogged down in the science and the only meaningful implication would require teleportation to be so well defined that it would be pointless, because as developing the rules for teleporation you would shape the interpretation.  It is similar to imagining an alternate universe.  With nothing concrete, assumptions must be made which will undoubtedly shape the interpretation.  So the most important takeaway, Mr. Interviewer, is that I understand one of the key points of engineering: check your assumptions.