This morning I got checks from my credit card company to use against my credit line. They were offering 0.00% APR until August 2010. Then it goes back to my normal credit card APR of 12%. My current auto loan interest is about 7%. Sounds like a deal.
But, of course, in fine print there was transaction fee of 3% of total check amount. So I did some math:
- I owe about $9000 on my car.
- 3% of 9000 = $270
- I would need to pay off this amount in 9 months to avoid much higher APR.
Now let’s look at what would happen if I pay off my current loan in 9 months at 7% APR.
- Month 1: Balance: $9000, Payment: $1000, Interest paid: 9000 * 0.07 / 12 = $52.50
- Month 2: Balance: 8000+52.5 = $8052.5, Payment: $1000, Interest: $47
- Balance: 7052.5+47 ~= 7100, Interest: $41.5
- 6100+41.5 = $6141.50, Interest: $35
- 5141.5+35 = 5176.5, Interest: $30
- 4176.5+30 = 4206.5, Interest: $24.5
- 3206.5+24.5 = 3231, Interest: $19
- 2231+19 = 2250, Interest: $13
- 1250+13 = 1263, Interest: $7
- 263+7 = 270, Payment: 270, Interest: $1.5
- Total interest paid: $271
So it is just a dollar more to continue with my current loan, but this gives me piece of mind that I don’t have to make huge monthly payment to avoid much higher interest rate.
Above calculations are a little rough, you will probably want to use some online calculator to figure out more precise numbers like: this one.
Inspired by J.D.’s post, I decided to see how I spent my money last year. These are some of the interesting categories.
Bad Habits
- 2007: $2,520
- 2008: $1,630
These habits include smoking, bars, clubs, video games and other such things which I don’t really like anymore. Luckily, by summer of 2008, I was already cutting back on these habits. That’s why I almost saved $900 compared to 2007. I plan to eliminate all these bad habits this year.
Clothing
I buy clothes only when I need something. Even then I usually use my credit card points. Most of my clothes and Shoes come from Gap, Express and Target. I think $400 on clothes per year is quite reasonable.
Dining
- 2007: $1,530 – Coffee: $190, Fast Food: $670, Eating Out: $680
- 2008: $1,880 – Coffee: $370, Fast Food: $810, Eating Out: $700
It looks like I drink way too much coffee. I have actually stopped drinking coffee in Starbucks. My own coffee taste so much better. Since I don’t cook, i am not sure if I can cut back on eating out though.
Hobbies & Activities
Wow that’s a big jump. Stuff in this category includes, photography, music, movies, road trips, camping and more. I did buy a new $800 camera last year. Even if I exclude new camera, I still spend twice as much money on this category than 2007. However, this category includes things that I like and I am not to worried about extra money spent last year. 2008 was indeed fun year.
Groceries
Kinda surprising that I spent so much money on groceries. Only thing I buy is bread, cold cuts, cheese, milk, cereals and cleaning supplies.
Anyways, it was really insightful. I use only one credit card for all my transactions and I simply import that data into Quicken. I carry only a few bucks in cash for emergencies, so usually I know exactly how my money was spent.
First, I cannot believe that every year we hear but people getting trampled during Black Friday but no one do anything about it.
This year 3 people died. I think they should go back check the security videos and charge every person who stepped on these people for murder.
Anyways I was going to buy a laptop but my 5 years old laptop is still usable, so I talked myself out of it. My brother on other hand has 2 better than mine laptops but still he bought a new latop. Why do you have to buy something just for a good deal when you don’t really need.
Today in one of our meetings, senior leader said that technology should not be driving the business instead it should only come into play after business need is defined. At some level, I always knew technology is just a tool for a solution but not a solution. But I never really put that into practice. I guess thats why so many of my previous ventures failed cause every time I learn about something new, i want to go out and build a business around it. I wasn’t sure how I can build a business on Facebook but I just wanted to do it. Perhaps I just wanted to learn technology. I just bought G1, not because I wanted a new cool phone but because I wanted to write applications for it.
I guess now I need to find out what I really want to do, perhaps, it is not even related technology.
Frustrated by his demeanour, a Republican congressman, John Mica, tried humour: “If you haven’t discovered your role, you’re the villain today. You’ve got to act like a villain.”
Fuld stared back wordlessly, without a shadow of a smile.
haha, read more here
I haven’t written a detailed post in a while because I had this epiphany. I am working too hard all the time. My parent always pushed me. I was never satisfied even after great successes. I still never feel satisfied. I think its time to relax a bit. I will make it when I make it. In meantime I don’t need to sacrifice fun and enjoyment. I need to be content. I don’t really enjoy late night coding anymore. So I should stop coding and find out what I really enjoy. 
i was reading “Once You’re Lucky, Twice You ‘re Good” by Sarah Lacy. She tells the story of how this generation of Silicon Valley entrepreneurs are serial multi-billion dollar companies. For them making only one company just one successful company means that they were lucky. Instead, they go on making successful company after company.
I have actually read only first 2 chapters of this book. But I am already re-thinking my goal of making a million dollar by the time I am 30. My new goal is to make a billion dollar plus company by the time I am 30.
To be honest, I am very satisfied with what I make right now. Thanks God. If I want to live a normal life, I will be very happy to continue working in corporate America. But I have desire to succeed beyond normal, money is simply a scorecard for me.
Still I don’t know how I will do this, but I know that I am running out of time. I am on vacation for next 2 weeks which I will probably spend contemplating on what I need to do.
I know its a bit late for new year’s resolutions. I actually made these resolutions at the beginning of the year but I haven’t made much progress on these. One of my favorite blog write, recommends that if you are unable to keep your resolutions, then make those resolutions public. Let everyone see your resolutions. Then make yourself accountable by reporting your progress to those who you know about your resolutions.
So I plan to announce my resolutions for this year, and I will report at least weekly progress on these resolutions. Here are my resolutions:
- Get my SCJD Certification
- Run for an hour (I can run and walk for an hour)
- Learn Arabic (I am going to weekly classes)
I am also adding my big project of making $1,000,000 to this list. I was talking to Karl and he told me why don’t you make dating website. After some thought I figure why not make this dating website for facebook. A lot of my developer friends are into facebook apps. And I like my friend, Jordan’s saying that in order to get rich you don’t need an original idea. You can use any idea or business and just execute it better. So I think I can make a better dating app for facebook. (although there are already tens of such apps). I don’t think this dating app will make me money but it will be sort of proof of concept.
So I have 4 tasks to report on every week and hopefully more often.
I am 27 right now. To be honest, I had almost given that dream. I thought It was not possible. I got a 9-5 job. I make fixed amount of money every month. I hardly have any money for fun and stuff. There was no way that I could save or invest money from my job and make $1,000,000 before I turn 30.
Luckily, last night I met some extra ordinary people who I am sure to meet again. These people are young, professionals, and motivated to achieve there dreams. They have some amazing ideas for their businesses. Thanks to them I was re-motivated and I am ready to invest my time and energy in figuring out how can I achieve one of my simple goal of having a million dollar.
You will see some more posts from me regarding this soon.
I was reading The Millionaire Next Door by Thomas J. Stanley. It talked about how some of the multi-millionaire live like middle income or even lower middle income. When I talked about this with my friends, they rejected living well below their means because it sounds stingy. They also complained if they cannot enjoy their hard work, then whats the point to working. If you want to be frugal, you can easily be homeless and you don’t even need to work to be homeless.
They have a valid point. I don’t think that I am stingy but I don’t spend money just cause I have some left over at the end of month. Recently, I got a traffic ticket. Luckily, I had some money saved and paid it off without even feeling any hurt. I remember back in my spend it all days, I once got a traffic ticket. It caused me to miss a feel meals because I had to cut the corners to save up enough money for it. Of course, I was making half what I am making now, but I was spending more than what I spend now.
First, I thank God for giving me a nice job that I like. And then I thank him for giving me power to control my desires to buy things that I don’t need.
