According to Wikipedia, “”Pump and dump” is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money.” I like to apply this to the entire stock market. I know I always get a ton of flack from all the personal finance gurus out there but hey it’s just my humble opinion. Whenever I see advice to invest your money, for retirement, education, or whatever, I think of a broad-based pump and dump scheme that encompasses the entire market. My conspiracy theory is that the baby boomers will yank all their money out leaving the next generation with an empty retirement fund. Funny if that did happen. So keep piling all your money into the market, just hope the next generation will do the same for you.
My favorite blogger, Debt Ninja from Punch Debt in the Face, has just said he was going to stop hoarding cash. I got excited for him to start enjoying his money that he saved up so diligently until I read further where he says he’s going to increase his contributions to his 401(k) and invest in taxable investments with a SLIGHT mention of lifestyle inflation. So in essence he is still hoarding cash, just in different vehicles. Once a PF person always a PF person. Except for me. I used to hoard cash like it was the end of the world. It started from my horrible experience of buying mutual funds from a scumbag life insurance salesman. After that I attempted to invest in the dot-com bubble making about 50k but losing that plus my initial investment of another 50k. Then 9/11/2001 hit right before I got married, my income dropped in half and my wife had a horrendous time finding a decent job. One of those interim jobs was at H&R Block where she did the taxes of senior citizens who lost everything from the dot-com bubble. When she saw them come in with tears in their eyes she told me she did not want to be in the stock market which I had no problem agreeing with. Ah the joys of being born in 1972 and dealing with these recessionary events. Now you know why I am a bitter Gen Xer. I swore off all investments and put our money into a high yield savings account. We saved up quite a bit considering our “low-income” by living frugally and saving as much as possible to build up an emergency fund large enough to weather another recessionary event. When the housing bubble burst we were paying off our house in 2008 and saving even more money because instead of paying $1200/month we now pay $200/month. That is when I learned how nice it was not to be in the stock market and getting a guaranteed return by paying off our mortgage. Even though we do not make a whole lot of money, having a paid off house makes a huge difference. Hence the road to life style inflation.
Being fascinated with personal finance and searching for some balance in my life, I came across a blog called All You Need Is Enough. It struck a chord in me. I wanted to be happier with what I already have instead of being so envious of others. I wanted to know what is really enough. How long do we have to travel on this road until we are satisfied. I think we’ve been on this road of lifestyle inflation a tad too long and should try to make a U-turn or at the very least slow down. Because of our low-cost of living, we should really be saving more to achieve financial freedom. In that respect, being envious of those who have large retirement accounts help motivate me to save more instead of spend more. Funny how that works.
Good lord (maybe I am religious…), trying to figure out how to blog on WordPress seems a bit difficult for me. I guess this is a start, much-needed after being a personal finance blog commentator for so long I should have done this way back when. Although I do feel so clumsy here which I believe makes my blog kind of low quality. My poor grammar and incoherent ideas don’t help either. Baby steps for me I guess. No one’s perfect right???
I thought buying an android smart phone would help me keep up with technology, but I don’t think I truly use it to its full capabilities. I even bought an iPad to learn a little about Apple. I even put Windows 8 (not that great by the way) on my computer that I built from parts I ordered from Newegg to try to keep up to date with Microsoft. Maybe I should build a Linux computer too. Gah! It’s expensive to keep up with tech…
Where do I start? How important is it? Is it even possible? Ever since I started reading personal finance blogs about 5 years ago it has been a quest of mine to find that elusive balance when it comes to money, life, happiness, etc. You would have thought I should have found it by now considering the amount of time I ponder over the internet looking for any hints. I wonder if it might have to do with me not being religious. It seems that most of those folks have quite a bit of knowledge on the subject. Maybe I should find some good books on seeking balance. Oh well, this should be an interesting journey. Then again, I probably give myself too much credit, might be a boring journey 😛