Andrew Lahde, manager of a hedge fund that profited enormously by speculating on the failure of firms that made major bets on sub-prime mortgages, has called it quits.

His "so long, and thanks for the fish" comes in the form of this letter.

Enjoy.

Check out this letter to the editor that was in today’s Wall Street Journal:

In your Dec. 1 editorial “Messing With Malpractice Reform,” you urge the Illinois Supreme Court to “side with the patients and the rule of law” in considering a case that could overturn the state’s cap on damage awards. Yet the editorial never mentions the patient who is at the center of that case.

She is a three-year-old little girl named Abigaile LeBron, whose life has been forever changed by the severe brain damage she suffered as a result of medical negligence. It is likely that Abigaile will have to be fed through a tube for the rest of her life. She will never develop cognitively or physically as her peers do. And she will likely never live independently. It is inarguably a very painful tragedy for Abigaile and all who know and love her.

The insurance industry and its brethren in the tort reform world have argued that Abigaile’s compensation for lifelong disability, pain and suffering should be arbitrarily limited, despite what a jury of average citizens may decide. The question before the Illinois Supreme Court is whether the Illinois Constitution allows Abigaile’s rights to be limited in this fashion to the benefit of insurance company profits. Twice before, our state’s highest court has decided in favor of patients and against the insurance companies that would limit these rights to protect their own profits. No new arguments have been offered by the insurance industry.

You argue that a reduction in malpractice premiums and the return of doctors to the state have resulted from the law containing caps. Nothing could be further from the truth. Not one case has been litigated under the new cap in Illinois. The simple fact is that those positive developments have resulted from strong, long-suppressed insurance reforms in the legislation. That law has now forced malpractice insurance companies to provide greater transparency on rate-setting and payouts that has in turn spurred competition, motivated more companies to enter the marketplace, and lowered premiums for doctors. Important to the discussion for your readers is the additional fact that Illinois’ largest malpractice insurer has reported that payouts have remained flat for the past 13 years. By the way, it’s the same insurance carrier that admitted during the run-up to this legislation in 2005 that capping awards would not guarantee lower premiums for its doctors.

The Illinois Constitution was put in place to ensure individual rights and freedoms. While corporations and profit-hungry executives often stack the decks against individuals in the marketplace and the halls of government, the courtroom can still provide all parties with a level playing field. The Illinois Supreme Court will now decide whether that standard remains in place for patients like Abigaile LeBron. You should let it do its job.

Philip Harnett Corboy Jr.
President
Illinois Trial Lawyers Association
Chicago

Here’s the problem I have with juries being able to award money damages:

They have no concept of how much money they are awarding. It’s not their money so why not be a cheerful giver?

I’m not saying that what happened to the little girl in the editorial isn’t a tragedy. It is.

I just think it would be nice for lawyers to stop hiding behind the sad stories, be honest and say, “I don’t like tort reform because it severely limits how much money I can make!” It’s silly to talk about “greedy” insurance companies when the lawyer gets a nice percentage of the winnings.

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When you are poor you would like someone to share your financial burdens; you want to someone to give you some tax relief; you want someone to give your kids financial assistance to get through college; you want someone to bail you out of the financial crisis; it seems logical for you that the “rich” are taxed more - you call that graduated tax; you consider it fair that there are incentives/affirmative-action for the economically and socially challenged; the growing disparity between the quality of life in the rich and the poor bothers you; the concept of “free market” doesn’t always work in your interest; you find it surprising that CEOs are paid several million dollars a year while you can barely make your ends meet; you generally don’t like that the fact that health insurance is controlled by for-profit companies; and you want the government to have some control over banks/firms who handle your retirement money; you generally envy the “capitalists”.

When you are rich you want to enjoy all your wealth by yourselves; you think “poor” people are “poor” because they aren’t working hard enough to get “rich”; you think it’s unfair that you are taxed at a higher rate than the “poor” - you call that “spreading the wealth”; for you “charity” is only a means of reducing your taxable income - you generally don’t believe that “wealth should be spread around” so the concept of “charity” doesn’t really appeal to you; you are a staunch supporter of “free market” (but you still want the government to bail you out of financial mess - I don’t know what’s up with that); you recoil in horror because some plumber who earns more than $250,000 a year will pay about $3500 more per year in taxes; you think it’s draconian to limit profits or pay of any company or individual; you don’t care about the fact that health insurance is offered by for-profit companies - because you can basically afford anything they charge; you want minimum government involvement in anything that you are associated with financially; you believe that lack of government control leads to a “self-correcting” market; you generally hate the “socialist”.

The world isn’t black and white.

There are two components to each transaction: compensation and risk. While many investment bankers and business owners tend to focus almost solely on compensation, PLG Advisory Group gives equal consideration to the risk associated with each transaction.

There are three primary areas of risk:

(1) Known risks, for example the liabilities set forth on the company's balance sheet, or known regulatory risk;
(2) Unknown risks, for example, unanticipated employee or customer lawsuits; and
(3) Transactional risk, which is the risk that the transaction will be litigated, either prior to or after a closing.

How do small business owners view risk in a business transaction: is price or the reduction of risk the most important component of a M&A transaction?

Oil dropped another $3.12 to $43.67…the lowest level since January 2005.

If someone would have told me back in July that oil was going to be trading in the 40s by the end of the year, I wouldn’t have believed them. It’s simply amazing how quickly things can turn.

Of course the bad side to all this is that now there’s less incentive for finding alternative fuels. I guess all those plans will get put on the back burner until it makes financial sense to go for them.

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Frugality is quickly becoming a buzzword in America with people’s retirement dreams taking a bit of a detour into a ravine — and right before the holidays, too.  How very inconsiderate.

Here are a few tips and tricks for descroogifying what might be more modest holidays:

• Check out the library and paw through some December family-oriented magazines. Ones like Redbook, Family Circle, and Ladies Home Journal regularly have articles with lists of frugal tips, especially around the holidays.  These magazines also have the advantage that the tips don’t get terribly outdated the way some other magazines might.
• Hit thrift stores for little kids’ toys. (And for big people’s toys, too.)  When giving a gift, consider whether “new” can be extended to include “new to them.”  Antibacterial soap and water for plastics, or a gentle wash for cloth, can do wonders.
• Resist the temptation to buy inflatable holiday lawn ornaments. I’ve long thought that big huge inflatable snow globes and the like are tacky, and if you don’t have them, consider yourself all the richer.  (As will I.)
• Put up a website with pictures instead of sending out Christmas cards. If you already have your own web space, most hosting providers will allow you to password-protect a directory.  Then you can e-mail the link, and the username/password, to your friends and family.  Well, you can e-mail it to most of your friends and family, but your 97-year-old great uncle might still appreciate the snail mail.  If you don’t have a website or if this is too much trouble, then DropShots.com lets you upload up to 500 pictures and 20 two-minute videos for free, without ads, and lets you decide who you want to see them.
• Try your hand at cinnamon-applesauce ornaments. My wife tried some of the recipes over at HandMadeCountry.com and found the second recipe to work pretty well.  You might be the only one in your circle of friends who does this, and they’re inexpensive (especially if you get the cinnamon at Costco).
• Speaking of cinnamon, it’s really good for you, and it adds flavor to a number of ordinary drinks.  Sprinkle a little bit of cinnamon on top of the coffee before brewing.  Or, warm some apple cider on the stove with a cinnamon stick.
• Attend a school holiday chorus/band concert. The music is better than you might think.  If the rehearsals are anything like when I was in high school, there’s probably at least 30 hours of solid preparation that goes into these concerts from the beginning of the year to December.  There’s at least a little bit of magic that happens during that time.  And you can’t beat the price.
• If you’re going to give money as a gift, you might be able to get by with giving a little less for the same “wow” factor if you give shiny Presidential dollar coins instead of regular bills. (One for each President issued so far only sets you back eight bucks right now!)  Or, if you’re a really big spender, a full assortment of state quarters is only $12.50!
• If you’re after one of those “hot, must-have” toys that you’ll fight tooth and nail for, stop. Take a deep breath, and step away from the shopping cart.  You might even consider not going on eBay, because there will be opportunities for you to pay way more than retail for it.  (I did this with Wii Fit but I felt I had a better excuse.)  Instead offer it to your kids after Christmas when there will probably be plenty of them around.  Maybe wrap a picture of it with a note.
• Through all of this, remember that the greatest gift of all is freely given for anyone who asks for it.

(Photo credit: shutter.chick)

PRESS RELEASE:

Pittsburgh, March 2007 — Russ Thornton has been awarded the Accredited Investment Fiduciary® designation from the Center for Fiduciary Studies. The AIF designation signifies training in fiduciary responsibility and follows a two day course and examination.

Thornton, a resident of Atlanta, GA is President of Thornton Wealth Management. He specializes in providing investment management solutions to individuals, trusts and corporate retirement plans.

The Center for Fiduciary Studies is the first full-time training and research facility for fiduciaries. The Center, associated with the Center for Executive Education, Joseph M. Katz Graduate School of Business, University of Pittsburgh, teaches fiduciary standards of care and investment best practices designed for trustees, advisors, and other investment professionals. They also offer an Accredited Investment Fiduciary Analyst? designation signifying the ability to perform fiduciary assessments. Programs are offered throughout the year at the University of Pittsburgh?s Center for Executive Education, Stetson University?s Celebration Campus in Orlando, Florida, University of Washington in Seattle, Rice University in Houston, and the Wharton Business School of the University of Pennsylvania?s West Campus in San Francisco. Courses are also available internationally in Canada, Singapore, New Zealand, and Australia. For more information on future events, training programs and fiduciary products, visit www.fi360.com.

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Essentially, Leasing is just an alternative way to finance a new vehicle. We know that when purchasing a new vehicle the down payment, sales tax and license fees are required to be paid up front. However when leasing a new vehicle you are required to pay only the first monthly payment, a security deposit (usually same as monthly payment), and the license fees. The sales tax (which is based on the capitalized value of the vehicle) is actually amortized over the term of the lease in most states. In other words, the taxes are included in the monthly payments.

Capitalized Cost

Essentially the capitalized cost of a new vehicle is the actual price you have agreed to pay for the vehicle.

Gross Capitalized Cost

The gross capitalized cost of a new vehicle includes the selling price of the vehicle (which is the capitalized cost plus acquisition fees, extended warranty, accident & health insurance, dealer title fee, payoff on your trade-in, credit life insurance, gap insurance and any other fees the dealer decides to charge you). Buyer beware; that most people really don't ever know what their capitalized cost is because it is buried within the gross capitalized cost and the dealer doesn't actually reveal this number unless he has to. Most car deals made at auto dealerships are negotiated on the basis of payment rather than price. This applies to both leasing and purchasing. Don't get caught in this trap! Make the dealer reveal the selling price for every payment offer he makes you!

Adjusted Capitalized Cost

The adjusted capitalized cost of a new vehicle is the gross capitalized cost minus (-) your down payment, net trade-in amount, rebates, license fees and taxes along with any other deductions given.

Depreciation/Residual

When purchasing a new vehicle your payments are based on the full value or selling price, plus extended warranty, tax & license, minus (-) rebate, down payment and net trade-in value. However, when you lease a vehicle your payments are based only on the "depreciation or your use" of the vehicle during the entire term of the lease. The depreciation is actually only a portion of the capitalized cost of the vehicle and is determined by the term of the lease, number of miles driven and condition of the vehicle at the end of the lease. The payments on a lease are based on the deprecation money factor (which is a form of interest rate) and the amortized taxes. Therefore, you can actually drive a more expensive vehicle with a lower payment if you lease. Please note that the depreciation is actually estimated and set at the inception of the lease.

The residual is the portion or balance of the adjusted capitalized cost after the deprecation has been deducted. The residual is just put aside in limbo until the end of the lease. The higher the residual - the lower your monthly payment. At the end of the lease you have two options. You can either turn the vehicle back into the bank or leasing company, or you can buy the vehicle outright for the residual balance. You can even refinance the residual. But keep in mind if you turn in the vehicle with more mileage than allowed on your contract, you will be charged any where from .12¢ to .25¢ for each extra mile. In an auto lease you are limited to a specific number of miles in your lease contact. The average would be from 12,000 to 15,000 miles per year. You may drive any number of miles in any given year but you cannot exceed the number of allotted miles or you will be penalized. If you purchase the vehicle the charge for the extra mileage will normally be waved. Most banks and finance companies will allow you to add an extra 15,000 to 20,000 miles to your lease contract depending on the term of the lease. However, the cost of the extra miles will be added to your gross capitalization cost and your monthly payment will be increased accordingly.

Ownership

When you have entered into a lease contract you cannot terminate the lease or turn-in your vehicle prior to the ending date of the contract. If you do this the bank will report this as a voluntary repossession on your credit record. On an auto lease the vehicle is actually registered and titled to the bank or leasing company. Therefore you do not own the vehicle, the bank does. You get to use the vehicle and are legally responsible for the upkeep and maintenance. Please note, if you don't maintain the vehicle during the lease you will be penalized for all excessive wear-and-tear when you turn it in. Also, if you really needed to get out of your lease you can buy out of the lease if you can get the financing or you can get someone to take over your lease. Of course, they will have to qualify.

Vehicle Warranties

The average new car warranty is 36 months or 36000 miles, which ever comes first. It is not recommended that you enter into a 4, 5 or 6 year lease contract because they are not economical. Even with a four-year lease it is common for the residual to be higher than the actual value of the vehicle at the end of the lease which makes it very hard to refinance. If you are like a lot of people you can lease a new vehicle every 2 to 3 years and never have to buy an extended warranty. The only time it would be beneficial to buy an extended warranty is if you knew you were going to buy the vehicle outright at the end of the lease.

Gap Insurance

Gap Insurance is basically insurance coverage on the difference between the actual value of your vehicle and the balance you owe on the lease including the residual. This kind of protection is needed in case your vehicle is involved in an accident and is declared a total loss. Gap Insurance is important especially for people who lease vehicles. The lease on a vehicle is actually designed for the balance owed to be upside-down in relation to the actual value of the vehicle until approximately the end date of the lease term. At this time the residual should fall in line or be equal to the vehicle's actual value. Gap Insurance is good for purchase financing as well. The gap is not as large as in leasing, but you still stand the chance of having to put out a great deal of money.

Final Advice

Remember, there are two main factors you must consider when you are thinking about leasing an automobile. The first is how long you intend to keep the vehicle and the second is how many miles you travel annually. If you intend to keep the vehicle a maximum of three years and you only average 15,000 miles a year, then you should definitely consider leasing. If you want to keep the new vehicle for more than three years, you should consider purchasing.

When you lease a vehicle, you very rarely have to put any money down, so lease a new vehicle every two to three years and you won't owe any money on the old vehicle, plus you'll never have to buy an extended warranty. Also, you will have spent a ton of money less for each vehicle than if you had purchased them. If you want to keep a vehicle longer just buy it at the end of the lease.

Remember, don't let the dealer try to sell you on the basis of payments. Negotiate on the price only and when you have agreed on the price then tell them you have a trade-in. When you have agreed to your trade-in value then tell them you want to lease the new vehicle. Now you know what to do from here. Also, dealerships have a tendency to quote lease payments without the monthly tax. This makes a big difference in the monthly payments. If you don't control this you will be sadly surprised when you go into the finance manager to sign the paperwork. One more thing - when you are signing the lease contract, be sure to verify that the trade-in value you have agreed upon is actually deducted from the capitalized cost. Otherwise the dealer could wind up purchasing your trade for pennies and you would never know.

Visit My site http://www.autopurchasesecrets.com for more free information on the secrets the dealerships don't want you to know.

About the Author

Brad spent thirteen years in the Automobile business, specifically auto sales and worked for several Dealerships. He held positions from Retail Salesman up through New Car Manager and Fleet Manager. During this period Brad received an excellent education on what goes on inside the Automobile Dealerships. You can visit and communicate with Brad at his website http://www.autopurchasese

German Volkswagen Group expects to sell more than 800,000 vehicles in China this year, encouraged by its strong sales in the first half.

The projection, made by Volkswagen's China chief Winfried Vahland, is up from 711,298 units it moved in the world's fastest-growing major auto market in 2006. Its January-to-June sales on the mainland and Hong Kong rose 24.6 percent year-on-year to record 431,369 units, including 379,705 Volkswagen-brand cars, 49,267 Audi vehicles and Skoda 2,274 units.

The German company's record sales figure is likely to help it remain the top seller in China's passenger car segment though its rivals, such as the General Motors Corp. and the Toyota Motor Corp., have yet to disclose their first-half results in the territory. "This (record sales) indicates that our 'Olympic Program' has been yielding good results in China," Vahland said in a recent interview in Beijing.

Volkswagen, the sole automotive partner of the Beijing 2008 Olympics, flagged off the program in 2005 to launch 12 to 14 new models by 2009 in China. The automaker also intends to cut costs by 40 percent by 2008 and to improve sales and service networks.

Vahland predicted that China's entire passenger car market would reach five million units this year, up from the company's previous forecast of 4.6 million units. In 2006, 4.2 million passenger cars were sold in the country. "However, we will not slacken our efforts to cut costs and improve customer satisfaction, although we performed well in the first half," he said. He warned that interest rate rises and soaring oil prices in China are likely to have a negative impact on the car market.

The VW turn signal alerts the automaker to a greener pasture. The German automaker now runs a joint venture with First Automotive Works Corp in the northeastern city of Changchun. The venture is responsible for the production of Bora, Caddy, Jetta, Golf and Sagitar, as well as the Audi A6 and A4. Additionally, the venture will launch a 1.8-liter turbo Magotan sedan next week.

The Mangotan also features Fuel Stratified Injection in nearly every petrol version. It ranges from 1.6 to 3.2 L, but the multivalve 2.0 L TDI is the most sought out version in Europe. In the United States, it features a 200 horsepower 2.0 L turbocharged I4 as the base engine, or a 280 horsepower 3.6 L VR6 engine as the upgrade and six-speed manual and automatic transmissions.

An Tiecheng, the venture's general manager, said that it plans to roll out at least two new models under the Volkswagen and Audi marques annually in the next five years to lure increasingly sophisticated auto purchasers.

The VW Mangotan, also called the Passat, follows the latest design philosophy first introduced on the VW Phaeton luxury car. The new styling is a dramatic departure from the styling of the B5.5 Passat. Although the new design using improved VW parts is somewhat controversial, sales have improved over the old model.

For the full year, VW, which operates car manufacturing ventures with leading Chinese auto maker SAIC Motor Corp. and FAW Group, aims to increase its sales by roughly one-fifth and maintain its 17 percent share of the world's second-largest auto market, a senior company executive said.

The venture will have a "minimum" profit growth of 25 percent this year from 2006, said Joachim Wedler, its vice-president in charge of finance. But Wedler did not reveal how much the firm, in which FAW holds a 60 percent stake and Volkswagen 40 percent, will earn this year.

The Wolfsburg-based company is one of the world's biggest producers of passenger cars and Europe's largest automaker.

About the Author

Anthony Fontanelle is a 35-year-old automotive.buff who grew up in the Windy City. He does freelance work for an automotive magazine when he is not busy customizing cars in his shop.

Buy books that are used. Most are in good condition. You’re buying the book for the words so don’t worry that the spine is a little bent or the pages are a bit folded. I just bought a $35 dollar book on Amazon.com for $15 bucks used.

Some people are irked by buying books used. They’re afraid that the previous owner had abused and neglected their book before putting it on the market. Rest assured: They’re nothing wrong with most used books. The previous owner is selling it because they need the money. Or they do what I do and buy books and then not read them.

[Photo Credit]

Sponsor: Parlayer - Henry and Matt blog about sports and stuff.

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INDYMAC IS OFFICALLY CLOSED!!!

In the past minutes newswires around the country and world are now reporting that the Federal Government has shut down IndyMac Bank and has handed it to the FDIC (Federal Deposit Insurance Corp.) as conservator.

Couple the shut down with the Fannie Mae/Freddie Mac troubles, and we’re in for some really rocky waters next week. I’m willing to bet a lot of money that the announcement was held back from being made prior to the close of the stock market because of fears of a massive crash. Well . . . I think we’ll be seeing that happen this coming Monday!

Fasten your seat belts, people . . . we’re in for a ROCKY RIDE!

IndyMac Bank’s assets were seized by federal regulators on Friday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.

The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.

Yahoo Finance

In the biggest bank failure of the housing downturn to date, federal banking regulators today closed IndyMac Bank FSB, naming the Federal Deposit Insurance Corp. as conservator.

The FDIC said it will transfer insured deposits and “substantially all the assets” of IndyMac Bank, to a newly created successor, IndyMac Federal Bank, which will be operated by the FDIC.

Insured depositors and borrowers will automatically become customers of IndyMac Federal, FSB and will continue to have uninterrupted customer service and access to their funds by ATM, debit cards and writing checks. Depositors of IndyMac Federal Bank FSB will have no access to online and phone banking services this weekend, but will regain access to them on Monday.

Inman News

IndyMac Bancorp Inc. became the second-biggest federally insured financial company to fail today after a run by depositors left the California mortgage lender short on cash.

The Pasadena, California-based bank specialized in so-called Alt-A mortgages, which didn’t require borrowers to provide documentation on their incomes. Its home state has been among the hardest hit by foreclosures.

Bloomberg

What’s next? Anyone?

Advertisement: Payday Loans Online from the leader in online cash advances since 2003.

This Post is from the BiggerPockets Real Estate Blog. Copyright © 2008 BiggerPockets, Inc. All Rights Reserved.

BREAKING: IndyMac Bank is Shut Down and Taken Over by Feds

My wife has wanted to move into town for quite some time so that she can be a little closer to friends and to our other activities.  I’ve been reluctant to move for a few reasons.  First, I think if we bought now, it would be like trying to catch a falling knife.  Second, it would be a longer drive to work for me.  Third, I don’t like change.  (None of these are her fault. )

And just as much as I feel pressured when my wife tells me about a good house that’s come up for sale, she probably feels frustrated by my reluctance to take any serious action on it because “this is just the beginning of the downturn” and “there will be more, and better, deals later.”

Actually, regardless of how far I feel the housing market is going to go down, I don’t really know.  I can get warm fuzzies that it’s getting to be more of a buyer’s market, but I won’t really know until I start tracking home prices.  Tracking prices is pretty straightforward, and has some advantages:

• It’s easier to recognize a deal when it comes along.  There is a huge amount of information literally a mouse click away, and tracking the price of desirable houses over time shows clearly what these houses were being offered at.  Rather than sensing that a house is a good deal, I can see that it is.
• It’s active.  It’s searching with a purpose.  It’s still basically window shopping, but I know which stores I’m going to. 
• It’s focused.  We’re looking for a house to move into.  This narrows our search and makes it more time-effective.

Here’s how we’re going about it now:

1. I signed up for an account at Realtor.com.  This allows me to save searches — and have daily or weekly e-mails sent to me — filtered by ZIP code, price, number of bedrooms, etc.
2. Since my wife is pickier (!) she chose the acceptable candidates among the few dozen houses that met the search criteria that Realtor.com allowed.  We could have fewer results to go through if we filtered by square footage, but not all of the listings include a square footage.  So, we pile through some more listings but turn up a few more candidates.  We eliminate most split foyers since she really doesn’t like those.
3. We build up a spreadsheet with the following columns:  ZIP Code, Address (to identify the house), Subdivision, Bedrooms, Bathrooms, Square Footage, Basement (no, yes, or split level), Garage (no, one-car, or two-car), and Asking Price.  We make one row per house, and add columns at the end to track the asking price over time.  We also list the houses that meet the search criteria but don’t meet our criteria so that we don’t have to re-visit those listings each week.  The columns are the criteria that are important to us; if you do this, you may have other columns you want to consider.
4. Houses keep getting prices added as long as they’re listed.  If they’re taken off, then we keep them to see if they come back on again.
5. Later we may add houses listed for auction or on other services, since some sellers are going the route of national real estate listing without the commissions.

Here are some of the measurements that can be done from these numbers:

• Number of listings.  The number of listings can fluctuate with the seasons (winter is slower).  If prices are going down for similar properties, or if the prices for properties we’re following are going down, then an increase in the number of listings could be good, as it means people are coming to their senses and trying to sell for what they can get.
• Time on the market.  We’ve gotten a few new listings, so we can see how long they stay on the market.  Knowing this would help us should we want to make an offer.  If the house has been on for a good long time, we can offer more aggressively (lower).
• Price per square foot.  This is a rough measure but a useful one.  If we really can buy more house for our money, we should see a reduction in the price per square foot.

The nice thing about this method is that it’s free.  Once we get the hang of this and get closer to making a decision we may sign up for www.RealtyTrac.com to get a handle on foreclosed and bank-owned properties.  We’ll probably pull the trigger on this when we are in a better position to make offers.

Tracking prices takes a little time but I’m sure this will help us to make a wise decision when we decide to look in earnest.

Since reading some comments on my last post, I had been thinking about what this whole deal with “personal finance” is about; is it about making the most amount of money? or is it about saving the most amount of money? or is it about spending the least amount of money? or is it about reducing stress due to money matters? or is it about this obscure concept called “financial freedom”?

The more I think about it, the less specific I get about possible “correct” answers to that question. In fact, looking back at my life, it seems that at different times, a different answer suited me depending on my financial and personal situation at that time.

What came out of this thought process was the realization that personal finance is not just about “maximizing money” - as I used to think earlier - and like most people probably think about it.

It’s not about maximizing. It’s about optimizing.

Given a financial situation, personal finance is about making the best of that situation. Sometimes it means trying to make as much money as you can, and at other times it means trying to make your money work to make you more efficient by reducing your stress, and at some other times it means that you save every penny to make sure that your children don’t inherit your burden of debt.

There is nothing wrong in trying to “maximize money”, but it is important to realize that, depending on your personal situation, there are costs (in terms of stress and time) associated with trying to do that.

Examples are numerous (but vague and difficult to explain) in this area, but a simple one would be to think of a job in which you are paid overtime. Every extra hour you work might mean that you will become richer than the previous hour, but it does not mean that you would be stress-free - or that you would be able to devote enough time to your family. If you overdo it, it wouldn’t be too hard to make yourself and your family feel miserable even with the extra money you earn.

Working your ass off for a few extra bucks might be a good idea when you are a bachelor with hardly any cares in the world, but if you are a family man, then you might be better off by working a little less in lieu of spending a little more time with your family. Now, just because you gave up that little extra money to spend time with your family or to reduce your stress, it does not mean that you are careless or frivolous with your personal finances. In other words, just because you chase every penny, it does not mean that you are an epitome of financially astute people.

In general, for the sake of the betterment of the whole universe and your own self, try optimizing your money instead of maximizing it. It also helps to reevaluate our understanding of “personal finance” in perspective of our changing personal situation and revise our money-chasing efforts accordingly.

Duh!

There is so much bad news floating around, so much to be worried or angry or upset about in the world. However there is a lot to be grateful for as well, so I thought I would take a moment and count a few blessings. This may be a bit late, considering Thanksgiving was a week ago, but I suppose it is never a bad time to be grateful.

A few quotes on the subject I have read recently:

“Life isn’t fair, but it’s still good.” - Unknown (to me)

“To be grateful is to recognize the love of God in everything He has given us-and He has given us everything.”-Thomas Merton

Now you may not be religious, but that last quote really struck me when I read it. It reminds me to take the bad with the good, and to appreciate it. It might seem wrong or even stupid to try to appreciate what seems unfair, bad, or even evil, but it is possible - and important. We can learn and grow and change for the better as a result of every experience - be it sickness, recession, job loss, or even death.

I once overheard my mother say that having cancer was a huge blessing. I recoiled, but she explained that it brought our family closer together and made her realize her inner strength. Remembering that comment has always kept me in check when I find myself whining or self-pitying.

Things for which I am grateful:

• Having a job and a regular paycheck; not everyone does right now.
• Not having to worry about where I’ll get my next meal or bath.
• Having the means and time to give to others who need support.
• A large family which supports and uplifts me.
• The freedom and ability to learn and pursue whatever I choose.

Many in our country are struggling, some for the first time, as our economy sags and companies lay people off and wages stagnate. Of course we are all still much better off than many in the world, but is still natural and easy to worry, to complain, to be angry and even scared.

But struggles can bring us together, and they can encourage us remember what’s really important - what matters a lot more than the 401k balance or the big bonus check. I hope as this volatile year comes to an end that we can all find some things to be truly grateful for.

More from Meg at The World of Wealth

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