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Home > Archive: January, 2008

Archive for January, 2008

ING Direct - How Exactly Does the Interest Work?

January 16th, 2008 at 05:02 pm

Ahhh, 4.10% interest on my savings account feels good! Thank you to everyone who helped me see the light on this issue.

I have a question, however. I am under the impression that interest accrues daily and is credited to my account monthly. Hmmm. If I had $100 in savings today, would I have $104 tomorrow at 4% interest? And then would that $104 be $108.50 (or somewhere close) the next day?

That seems too good to be true.

State Budget Cuts = My Job in Danger

January 9th, 2008 at 04:40 pm

Well, Kentucky needs to balance its budget. That means education funding is about to be cut. Potential staff layoffs, hiring freezes, and other such wonderful things are on the horizon. Letters and memos have already been flooding through the state everywhere from community colleges, to state universities, to high schools: funding is being cut.

I pride myself on being an advocate of the free market. If a company can't compete, it shouldn't receive any help. The people who work in those careers should move on to more productive positions in the economy.

I may be faced with that now. The claim is art, business, home economics, and PE will be cut. Furthermore, I find it hard to believe that the 800+ students in my high school are going to receive English instruction unless there are the same number of English teachers as there are now. I guess I'm trying to say that I'm 70% sure that I'll have a teaching job this coming fall.

I don't like those odds one bit. Maybe I'm completely wrong. Maybe the last thing on anyone's mind is cutting English positions, but I'm the new guy. Other teachers there have houses and kids and tenure.

As I said before, I'm an advocate of the free market. I'll move on if I have to, but I'm not going to fib: it's going to hurt a bit.

This is why I save money. This is why I can't imagine living paycheck to paycheck. I currently have three month's living expenses saved up. With the three months of summer that I'll still have paychecks and insurance IF I don't have a job next year, that's at least six months of living expenses. I could feasibly have ten months in my emergency fund by the time next August rolls around.

It may seem like I'm blowing things out of proportion. I'm just saying that I see a storm coming, and I'm going to be caught right in the middle of it. I stand by my 70% chance of having the same teaching job next year. If I don't get rehired, I'll have plenty of money saved up. I'll easily find employment somewhere else.

Like I said, though, it's not going to be painless.


January 6th, 2008 at 01:01 pm

Does anyone here have experience with Wesabe?

The Calm Before the Storm

January 5th, 2008 at 08:16 pm

The sky was overcast today, or at least, I think it was. I ventured outside once...maybe twice. I don't really know. I spent all day talking with friends in my apartment, playing drums, reading, surfing the internet, cooking, listening to music, and watching the presidential debates online.

It's been such a relaxing day. I hope tomorrow will be as well because Monday is the continuation of the craziness of last year.

Today was a no spend day, and it felt good.

Teachers, Student Loans, and Salary

January 4th, 2008 at 04:52 pm

I came across an interesting article in a National Education Association magazine. It was all about how the rising price of college tuition is impacting teachers and those who are considering going into teaching. Horror stories of people having up to 80k in student loans and being afraid of going into teaching were plastered all across the pages.

It's no secret that teachers don't make millions of dollars; however, we make a decent living. My starting pay this year was $34,500. If you're not too extravagant, that's a respectable starting salary. After I get my master's degree, I'll be making somewhere around $41,000, with salary for a classroom teacher topping out in the vicinity of $60,000.

Now, we've established that teachers do not make gobs of money, but they definitely don't make rabbit feed. This still leaves the question hanging, however: is it not enough money? Should teachers make more money?

Here's the simple answer: we'll see.

If teachers really are making too little money, fewer people will go into teaching. More current teachers will leave. Teacher quality will depreciate.

Now, this may lead us all to think that this will bring teachers' salaries up. That is not necessarily the outcome. While having fewer quality teachers will definitely harm our civilization, we may allow that to happen. What will determine our teacher quality is what our society ultimately values.

If we truly value education, we will fund it adequately. If we do not value education, no matter what we may claim, we will not fund it adequately.

As an educator, I don't really care which way things go. I love teaching, but if I didn't think I was making enough money, I'd go do something else. How much money I make from teaching is not something I get to decide. For the time being, I'm happy with my lot.

To bring things full circle, I don't think improving teachers' salaries is the answer to student loan debt. It is possible to get a quality and affordable education. I don't know why people are shocked that you can't be a teacher when you have $100,000 in student loans. There are a lot of things you can't do if you have that much in student loans.

DISCLAIMER (to be read aloud so quickly that the words blur together in one fine-print mumble): The above statement in no way means that the author does not appreciate the actions of the wise and venerable NEA in terms of fighting to put more cold hard cash in his pockets. Actually, the author applauds all such efforts and heartily wishes the NEA and all of its member-affiliates the best of luck in every valiant and noble quest they decide to undertake.

Does Index Fund = Eggs in One Basket?

January 3rd, 2008 at 07:17 am

As of now, my plan is to put 80% of my retirement in Vanguard's Total Stock Market Index Fund. That particular fund tracks every single American stock on the market. I plan to put the remaining 20% in Vanguard's Total International Stock Index Fund, which is a broad international fund spread among Europe, Asia, Africa, and some emerging markets.

This strategy comes straight from Suze Orman, and it makes a lot of sense to me. Suze makes the point that I can invest $300 per month for 15 years starting at age 25 and it will be worth more than a million dollars when I am 70. This assumes an average return of 8%, which is quite reasonable.

Now, I just finished Howard Dayton's _Your Money Map_. He has quite a different take on investing. I love Howard Dayton's advice, and I am following the Crown Money Map, which I would suggest everyone go check out at www.crownmoneymap.org

As I was saying, he has a different take on investing, or at least I think he does. It seems much more conservative. Basically, he advocates keeping 25% of your retirement in liquid or semi-liquid form by way of CDs, money market funds, etc. The remainder is put in index funds with more being put towards higher-risk investments as your money grows and eventually into a variety of different things such as real estate, etc. While this doesn't seem to offer the outstanding returns of Suze's approach, it does seem more diverse and safe.

Suze Orman's strategy is far simpler: just put it all in a broad index fund. I like the idea of just throwing $300 per month into an index fund for the next fifteen years and retiring a millionaire, but I don't know if that is putting all of my eggs in one basket.

You may be asking, "How is investing in a fund that tracks every stock on the market putting your eggs in one basket?". Well, that's what I am asking. Is investing in ONE fund, whether it tracks the whole market or not, not being diversified enough? In light of the mammoth financial problems the U.S. is facing now and will be facing in the future, is there any way to protect myself? Should I simply throw all of my money into the whole market and hope for the best?

P.S. Today was another snow day! Woo!

Of Sickness and Snowdays

January 2nd, 2008 at 09:06 am

I had a wonderful New Year's Eve party. My home was filled with friends and family. We laughed, played games, and...ate pizza.

I had a dream in the wee hours of January 1st that had something to do with my stomach being upset. I woke up to find that my stomach really was upset. I proceeded to do the things people do when their stomachs are severely upset for the next day. This included a sustained fever of 103 degrees.

While I haven't missed a day of school all year, I was going to have to call in because I have been visiting family some three hours from where I work. I simply could not drive under the circumstances, including a sever snow advisory.

Right as I was going to call in sick, I received an automated message from our superintendant. School was cancelled as a result of snow! Yay! I feel well enough today to make the three hour drive. Reason #548 why teaching is a wonderful profession: snow days!