What is dollar-cost averaging?

investing 401 kimage credit: Good Search

What is dollar-cost averaging? Are you someone who wants to invest money, but doesn’t make a move until you’re “too late”—so, you don’t invest at all? If so, then maybe dollar-cost averaging is for you. It’s one option to get you saving.

Let’s say you have $5,000 available for investing. You could either invest it all one time and let it be, or, you could ease into the market over time in equal installments at regular intervals (every month, or every quarter.) The index price may move from $100 to $75 to $55 to $75 to $100. Let’s say you buy at $1,000 installments. You’ll buy more shares when the price is low, and fewer shares when the price is higher. You’ll have an average-cost per share $81. If you put the entire $5,000 in at one time, your average-cost per share is $100.

History favors putting in a lump sum of money because over the (very) long haul, markets have gone up.

However, with dollar-cost averaging, which is basically what you’re doing if you have a 401(k), or other employer sponsored retirement plan, if you put some of the money in at the wrong time, you’re bound to put some of the money in at the right time. If you put a lump sum in at the wrong time—it’s gone. With dollar-cost averaging, you’re buying stocks when they’re low. That goes against everything our emotions tell us to do. Buy more when prices are low, and buy less when prices go up. The advice, “Buy low, sell high” is fine until we’re sitting in the driver seat.

During the strongest markets, dollar-cost averaging came up short with 19.2 percent less wealth than lump-sum investing. During average or weak markets, dollar-cost averaging will cost you 3.6 percent of your holdings. However, the strategy of dollar-cost averaging may help you sleep at night rather than fearing you’ve dumped $5000 into a black hole. It minimizes regret.

Ground Rules for Vacationing with Friends

splitting cost on vacation image credit: Good Search

Taking a vacation with friends can be fun—or not. Time together is all fun and games until squabbles over costs come into the vacation and memories. It’t hard for some people to talk about money, but it’s often harder to repair friendship over money issues that arise while traveling.

Before you go:

Discuss where you’ll go, who is going, and when. If you want to go to Italy in the Summer, and they want to go to  Ireland in the Fall, make sure no one feels “You always get your way.” If there’s a since of that from the start, suggest another trip, another time, but let it be known you’re going to Italy in the Summer—and you’re going to have a wonderful time!

If everyone decides to move forward from there, begin to put your plans in writing. Everyone going on the trip can get together and share ideas of what their ideal vacation looks like. Are you a four-star hotel type? Or do you like hosteling? If you earn points from hotel stays, and your friend earns them with a different hotel, what do you do? What if you have different frequent flyer airlines? These are the things that need to come up early in the planning stage. Maybe you’re both okay with not earning miles, and grabbing the least expensive flight, but if one of the two of you has enough miles for a trip on an expensive airline, you may not be traveling together.

What’s your vacation budget? Know it before you leave home and stick to it. Talk this stuff through with your friend. If you’re with someone who wants to experience high end restaurants but you plan to buy food from the local grocery shop, eat from food stands, or patronize the local mom and pop restaurant— You’ll want to have that discussion before the trip. Maybe you agree to one expensive night on the town. Get an idea of that means. I had an experience in Lapland, Sweden. A puny scoop of ice cream, a tiny piece of brie cheese, and a small vodka came to $75.00. Are you both on the same budget? Even if you are, it may not impact you the same. Maybe you say to your friend, “If you want to go to that restaurant, are you willing to without me, even if that means going alone?” Or have some days and evenings where you each do your own thing.

Once you have an idea of what the trip looks like, put it in writing. Include (researched) estimates of costs, timelines and budgets. If you can, either each pay for your airfare separately, and each send in half of the accommodations on your own—or try to have only a few bills and split all of them in half. (I don’t like to do this at restaurants, because my bill is usually much lower than others’.) If you’re eating meals at the beach house rental, equally pitch in for food, or totally do it separately. If they drink wine and you don’t, that’s not on your bill. If you insist on drinking soy milk and they can get by with less expensive cow’s milk, it sounds like a menu review may be needed before you get too far.

It’s really important to know your travel partner is saving for the vacation. If you save money and book your trip, and they don’t save, and decide they have to back out, you may find yourself in hot water (and I don’t mean at a spa in Hawaii.) I’ve had this happen to me twice. Once, there was a double occupancy requirement. My friend who hadn’t saved and backed out did pay the difference for me to go alone. Nothing was going to stop me from my trip.

Traveling together is a lesson in budgeting, communication, compromise and friendship. Go! Have fun!

Money and the Subconscious Mind

Money-and-Your-Subconscious-Mind1-300x163 image credit: Good Search

The conscious mind is the ship’s master. If you go around saying, “I have no money” your subconscious mind take you at your word, because the subconscious mind follows directions. It cannot argue, decide or initiate—It’s the servant of your conscious mind.

If you say, “I don’t have money”, your subconscious mind works to ensure you don’t have money for what you want. (Because that’s what you’re saying.) Your subconscious mind is just following your orders. Rather than saying, “I can’t afford that” try saying, “I choose to use my money elsewhere” or “I’ve budgeted for something else right now”.

It’s not about giving up desire for what you can’t purchase right now, it’s about being real, fiscally intelligent and planting the seed for the item to come your way. It doesn’t matter how expensive the item is, either. Who knows? Maybe it’ll be given to you as a gift, or you win it, or you have the money sooner than you originally expected.

Years ago while window shopping, I saw a dress at a boutique. I said, “That’s for me!” I went inside the store. The dress wasn’t in my budget, but I tried it on anyway. It fit and looked great on me. I took note of the size, and told myself I’d check back, and if it was on sale, I’d get it if I still liked it. A month later I did go back. My size was the only one left—and it was 50% off! I tried it on again and still liked it, so bought it. I still have this classic red dress with black velvet cuffs and collar. It still looks good, and I still love it.

I’ve known two people who were gifted with cars by non-family members. One of the cars was brand-spankin’ new. I’ve gifted people with travel, money, and finding what they’d been looking for, but couldn’t find themselves. I’ve won money, books, a Cat-in-the-Hat Pillow (at age six-when it was really important!), a month of in-door rock climbing, candy,  a scarf, hula-hoop contests —and cancer—twice.

Say, “I’m a winner!” and act like one. In other words, name it. Claim it. Act accordingly.

Earning Money

buttered toast  Image credit: Good Search

Earning Money. Did you leave a job, or were you laid off, and are now back in the workforce? Did you take a salary hit? You’re not alone. According to Urban Institute, re-employed workers ages 50-61 have taken a -21% hourly pay hit compared to pre-layoff wages. Ages 25-34 have taken -7% hit.

Are you in this group? Did you leave a job and can’t find one at comparable wages? Are you willing to take a new job anyway, even if it’s not what you want, not what you’re trained for, and not at that pay you are accustom? If not, what are you doing for income? Are you living off savings? Moving in with others? Moving to a less expensive location?

How’s your attitude, and outlook for the future? Do you feel you’ll “land like a cat” (on it’s feet), or “land like a piece of buttered toast” (buttered side down)? Do you have a support system? Do they help in obvious financial ways, or in more subtle ways?

If you’d like to share on any of these thoughts re: earning money or related,  please do.

The Last Word

This is the last post post from the blog, Minimalist Living. I’ve really enjoyed this blog. It was well written, and I’d cheer in agreement while reading. A fond farewell to “Minimalist Living” – but never to the idea, or the lifestyle! Take care.

Change The Code

Well I am feeling that the end is here for this minimalist living blog. I love to write and share various thoughts but the reality is I probably spend too much time blogging and not enough time on real world stuff that needs to be a focus.

So this may very well be the last post on Minimalist Lifestyle.

I have a number of thoughts in my head that I would like to touch on so here goes.

Let’s first look at the way the education system “trains” us to be slaves.

All the school system really does is teach us how to work for others and not to really think for ourselves.

The message we get from parents, teachers, and society is to go to school, get good grades, keep your mouth shut, don’t question authority and this will allow you to get a “good job”.

In both the…

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with whom do we spend time?

We tend to mimic behaviors of people with whom we spend time. Did your parents ever reminded you, “You’re known by the company you keep”? I have a friend who recently shared with me his dad would always send him off with, “Remember who you are and what you stand for.” I love that. If you’re hanging out with people who spontaneously spend, or try to keep up with the Joneses, it’s likely that you’ll spend more money. Hang out with people who are frugal, or plan (have a budget) for their big expense. By doing this, you’ll most likely fit into that behavior, at least when you’re around them. 101-ways-to-build-wealth

A study at University of Southern California found along the same lines, the more inward-looking a neighborhood, the higher the likely hood a resident will buy the same car as their neighbor, or outshine the neighbor’s car purchase.

Re-think the attitude, “One more drink on the Titanic.” (The ship’s going  down, so what’s one more expense?) Consider spending time with, perhaps volunteering for those less fortunate. A study at University of New South Wales, Australia found for every extra dollar earned by the people around you, you’ll put .09 cents less into savings. It’s not about dumping the richer friends, it’s about being conscious, and as William Shakespeare put it, “To thy own self be true.”

Another study, University of Pennsylvania professor Martin Seligman, showed that happier employees earn more money. The happier employees aren’t working 24/7. They’re spending time with family and friends. If you’re not fitting into this family/friend love fest, ask yourself if you like your neighbors? Can you meet new friends? It’s about having a supportive network, not necessarily similar genes.



 image credit: Google

Willpower. Willpower is a finite resource. We don’t have separate amounts of willpower for separate situations. If we spend all our effort resisting sweets, we may find we find fall into areas of other temptations—like a shopping spree.

A Florida State University professor had students fast, then put them in a room with warm chocolate chip cookies and raw radishes. Some students were told they could eat the cookies. Other students were told they could eat the radishes. The students told they could eat radishes had a harder time resisting the cookies. They’d pick up the cookies, and whiff the warm cookie aroma, then bite into their radish. It reminds me of the marshmallow study with kids (which I’m not a fan of. I’m glad this study was done with adults.)

After being in the room eating cookies or radishes, the students were assigned puzzles. They didn’t know the puzzles were unsolvable. The radish eaters endured half as long as the cookie eaters. Away from the cookie-radish group, was a room of hungry students who weren’t given any food. These students also did better on the puzzles than the radish eaters. Conclusion: The struggle to resist the cookies lowered willpower reserves.

When you set yourself up for success, you’re strengthening your willpower instead of constantly challenging it. It’s like a muscle. It gets stronger over time. The key to remember is, if you lessen the number of temptations, you’re setting yourself up for success. Eventually, it turns into long term success. This is true in any area of life: financial, physical, spiritual, social, emotional, mental.

Willpower isn’t about “willing it”, it’s about allowing the atmosphere to support you in your success. If spend money has the upper hand over your will power right now, put yourself in an atmosphere of an abundance of freebies. The park, the beach, walks around town. Or spend your time helping, volunteering away from the opportunity to spend money. Garden. If it’s internet shopping, don’t turn on the internet when you’re on your computer. Leave your credit card home. wrap your credit card in foil, then place it in a bowl of water – then into the freezer. How serious are you about setting the atmosphere for success? Willpower. You can do this! (The cat looks a bit nervous in the photo above, but some of the dogs have their willpower in place. They want the treat. They want the job!)

Savers and Spenders

 image credit: Google

Savers and spenders. It could be seen as two sides to a coin. There are those who think having “too much” money is bad, greedy, or evil. There are those who can’t get enough of money—whether by hoarding for status, or in hope that it’ll solve all their problems. Then there are those who could be considered tight-wads by their lifestyle of saving. These are people who can squeeze a nickel so tight, it gives Jefferson a headache.

It’s beneficial to know in which of these categories you tend to land.

By examining the emotions around what motivates you, you can realistically look at a situation and say, “Oh, I see it. The emotion, the small-self, the fear—whatever you want to call it, is afraid that: _________ (fill in the blank) money will corrupt me, I won’t fit in with the crowd, I won’t have enough to retire, even if it takes longer I must keep looking for a better deal. . . .

Consider journaling on your self-talk about money. Or paint, or draw your emotions. Maybe you can sit and have a “conversation” with your money issues. Ask it’s fear. Ask “why?” Ask yourself if you’ve outgrown that old belief — or why you haven’t. Maybe someone long ago told you what may have been true for them, but that doesn’t mean it’s true for you—especially now, as an adult, in your own life. It doesn’t make that person wrong, but it gives you control by your being conscious of what you believe.

Savers and Spenders. Two sides to a coin. What will you do with your half?

You Are Abundant!

 This man is giving his shoes to this woman.

Thanks to the people who’ve shared this photo—it’s floating around the internet and Facebook.


Feeling the money crunch? Change your thinking. It’ll shift your actions—which will alter your experience.

Do you see yourself as broke? What do you tell yourself and others about who you are? Do you think or say, “I can’t.” “I’m broke.” “I have to.” Those are lies. Begin with being 100% honest with yourself. You are provided for. Do you have more than one pair of shoes? More than one outfit? A computer? A refrigerator? —With food inside? And somedays you throw food away! Indeed, you are provided for.

If you find yourself in fear about money. Stop. Listen to you talk. Be aware of your thoughts. I believe prayer is to change our consciousness, not God’s. In The Lord’s Prayer it says, “Give us this day our daily bread.” It’s not about asking for next month’s rent. It’s to remind us, not God, that all is well. Prayer isn’t about, “Gimme more.” Prayer is about changing our thinking. When do you pray? Maybe out of gratitude, but often, it’s when a change is desired.

We’re provided for. Look for how you’re taken care of and more of the experience of being taken care of will show up in your life. Money may be tight for you, but you feel guided to give a dollar or more to someone, or to get them water on a hot day, or a warm drink on a cold day. You’ll go home feeling like a millionaire if you follow through on your desire to share a little something.

When you get home, you may find a neighbor left a treat—tonight’s dinner on your doorstep. (But it began with you.) You must first show yourself you trust the process of life. You must reach out to others to prove it to yourself that you’re taken care of. It works. If you doubt it, get going. Go out and look for all the ways the Universe conspires to support you! Take the first step. Have fun! Let us know how it goes!

Turn Hard Into Easy!

After a short skimming of the internet for some post ideas, I figured it out: People make budgeting waaaay to hard!

No wonder folks don’t set up a budget! In my short internet search, I came across a page chock-full of graphs, grids, analysis and assessment. For a budget! People get stuck in the “get ready to get ready phase.” People think they can’t budget because it’s too hard (or too boring.)

You don’t need to know Excel, or have a computer program to budget. You don’t even need to have a piggy bank. —Although, one of my favorite piggy banks as a kid was from Mexico. A white pig, with some colorful abstract paint designs. Another favorite bank of mine was a big blue “mailbox.” Two of my favorite things: money, and mail! Those banks are long gone.

Almost as old, a tin can with a plastic lid. The tin is covered with bright, colorful tissue paper I cut into primary shapes. The pieces overlap. I cut out a coin slot on the lid, and around it glued a Henry David Thoreau affirmation, “Keep moving in the direction of your dreams.” Every so often, I fill the empty coin rolls sitting in the tin—even if I end up with $7.50, I take it to the bank for deposit.

That’s part of budgeting. (Saving.) The other part is (no, not spending) tracking what you spend. It can be on paper, computer (again, you don’t need Excel. Just keep track of what you’re spending money on.) You can even use an envelope. Put receipts for one month. If you don’t get a receipt, grab a scratch piece of paper/napkin/business card etc. and write down $10. movies. Put it in the envelope.

At the end of the month, add up your expenses. Subtract them from the amount of money you have to spend.

income minus expenses equals extra or short.

What’s your plan?

THAT is a budget in a nutshell.