Thursday, July 12, 2007

Running update

The plan is to run tonight.  I get home, relieve the missus from her role as uberdomestique, then when baby goes to sleep and mommy returns home from her “me” time I’ll lace up the shoes and hit the bricks.  I should be running sometime close to 8:30 tonight in my neighborhood, so it should be nice a cool out—by Texas July standards.  The goal is 15 minutes solid running, no walking.  Then, next weekend, the big distance runs begin.

 

After next weekend I’ll start alternating between distance and timed runs.  I really want to work on the non-stop thing.  Even at the “peak” of my marathon training I can only think of a couple of training runs that I just ran without stopping.  One was the absolutely fantastic 11 mile run I whipped out at a 00:09:00 mile clip.  The other was… um… well, I guess I can only remember one training run that I ran without stopping.  Then again, at the “peak” of my marathon training I think I only ran twice a week and maybe 12 miles that week.  I didn’t run much, even at the peak.  Which is why I think that even with a moderate level of real, focused training I should be able to pull off a 4:30:00 marathon.  Despite the fact that I’m 2 years and 20 pounds heavier.  At least I’m still good looking.


In other news:

Read a “4 financial tips to avoid” article on yahoo today by way of the Wall Street Journal.  4 financial tips for young people that they should avoid.  In the intro they acknowledge that avoiding credit card debt and funding your 401k are good advice.

These are things to avoid, according to them:

1.  amass cash.  Experts say 4 – 6 months living expense should be kept in a liquid emergency account.  They say “bah” because if you save 10% of your after tax income it’ll take 4 years to amass 4-6 month’s living expense.  4 YEARS!?!  Besides, in the event of emergency you can borrow from your 401k.

 

Lets see, if you avoid credit card debt like they suggest, and are smart enough not to get into a car note right after graduation, living expenses amount to rent, utilities, and food.  Going out, movies, cable, and fashion accessories are not living expenses, they’re luxuries.  In the event of an emergency, you simply don’t need a new set of red pumps or another golf club.  Putting the handy dandy financial calculator to work… Rent shouldn’t be more than ¼ of take home, food and utilities shouldn’t be more than equal to that.  Even if you’re putting away 15% in the 401k you’ve got 35% of your paycheck left over.  Split that a little less than down the middle and you’re socking away 15% into savings.  Leave it alone and in 2 years VOILA!  You’ve got a fully funded emergency fund without even trying.  Not 4 years.

2 years?!?  Yea, I know.  That’s a long time to sit on your hands.  Unless you consider that you’ll probably already be on your second job by the end of that second year (4th, if you’re me).  Or you can rearrange that budget and put a little less into the 401k the first year (just enough to get the employer match, usually 5%), a little less on partying, and a little more on making sure you don’t lose your apartment when you lose your job and in less than 12 months you can have that fully funded emergency fund.  All you need is rent, utilities, food for 4 months.  Or you can go lean and just sock away a couple grand.

Besides, borrowing from that 401k in times of long term emergency (read, unemployment), means you’ve just undone that “stay out of debt” and “save for retirement” thing in one fell swoop.  Way to jeopardize the present AND future.

 

2.  Buy big.  The advice to avoid is to get the biggest house you can afford versus the biggest house you need.

 

That’s good advice.  There’s no need to buy too much house and have 3 rooms sitting empty because you expect it to appreciate in value.  You’ve still got to pay property tax.  You’ve still got to pay utilities.  You’ve still got to pay maintenance.  You’ve still got to mow the yard.  Figure out where you’re going to live and rent while you’re figuring it out (remember, that first job probably isn’t a keeper), and buy what you need (plus a little bit for expansion) when you’ve figured out what you want to do when you grow up.

 

3.  Get a life.  Insurance agents suggest young folks get cash value while they’re young because it’s cheaper than when they’re old.  WSJ suggests term life over cash value because, well, it’s better.

 

An even better suggestion:  skip it all together until you’re married.  HUH?  Yup, you heard me.  The point of life insurance is to take care of those you leave behind by replacing your salary with a life insurance policy.  You get 10-15 times your salary in a policy—term life policy—and take the cash, put it in an annuity, and let the annuity pay out to your beneficiaries out of the income.  But if you’re not married and have no kids, why have life insurance above what it takes to put you in the dirt.  And if you have some cash socked away, that should put you in the dirt when you’re gone.  Then you save an extra $25 to $45 a month for that emergency fund.  Until you get married or have a kid, though.  Because then the only responsible thing to do is get life insurance to take care of them.

 

4.  Go for growth.  The common wisdom is invest in stocks while you’re young because time will gloss over market variances.  Better wisdom is a diversified portfolio of stocks and bonds with a long view towards ultimate financial independence.

 

Even better wisdom is to invest only in what you know.  Unless you’re able to study the market daily, pay someone else to do it and put your money into a fund that is a balanced portfolio with a long view towards growth and financial independence.  If you’re checking investments every year, or 6 months, or every month, or every week, you’re not checking it enough.  A day is eternity in the financial world.  Enron didn’t collapse in a day, but every day for 3 months that stock bled millions in value until the company finally collapsed.  If you’re checking ever 6 months you missed that boat entirely.  A fund manager is checking daily, hourly even.  Those guys get paid very well to do what they do.  If you’re going to build your own fund do it with money you’re not at all afraid to lose.  The stuff you want to keep, give to a guy (or gal) who is paid to make sure you keep it.

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