Monday, September 24, 2007

What bad eating habits are we teaching our kids?

Parents may be making big blunders when they teach their kids to finish their food, and by placing restrictions on undesirable foods, according to a Scientific American Frontiers program titled "Fat and Happy?" The program asserts that children know instinctively when they become full, and teaching them to clean their plate causes them to ignore that instinct, leading to overeating. Also, placing restrictions on junk foods creates a "forbidden fruit" effect, which actually increases the children's desire for the restricted foods. Watch the following clip to see the children's reactions to different food control techniques, and the surprising results.

The next clip talks about the relationship between children's activity levels and their eating habits. It contains some good information as well.

You can view the rest of the video clips from the show on Scientific American Frontier's website. Some of it is pretty informative and eye opening. You may just end up changing your eating habits.

Sunday, September 23, 2007

My Story

I guess I had a humble but typical childhood. My parents were working class people, and didn't teach me much about money except to prioritize work before play. I was never allowed to watch TV until my homework assignments were done, for example, and was expected to receive A's in school. With both my parents busy working, I had to help with household chores, and there was no concept of an allowance. We had the basic necessities: a roof over our heads, and food on the table, but not much more. Still, I never felt deprived or resentful (ok, maybe I was a little bit jealous when my friends got money and toys for doing what I was expected to do), and in retrospect I am glad that I had to work for what I wanted because it taught me the value of money.

My first paid job was a newspaper route at the age of 10, followed by summer jobs throughout high school and college. I studied hard and did well academically, but that didn't leave much time for a social life. I graduated college with an engineering degree and about $10,000 in student loan debt, despite part-time jobs and scholarships. I didn't know much about saving and investing back then, but I knew that I didn't like the feeling of being in debt.

The job market for new college grads wasn't the greatest in the mid-90's, however I managed to find a position with a software consulting company making $31k a year. It wasn't much, but it allowed me to make my first major purchase (a car), and helped me with my finances in other intangible ways. The company offered a 401(k) plan, and made a huge effort to teach its employees about the benefits (tax-deferred growth, matching contributions, etc.), so once I saw the advantages of participating, I jumped on board immediately and socked away as much of my pay as the rules permitted.

That job entailed an extensive amount of traveling, which meant I didn't have to worry about getting my own place since my employer provided furnished accommodations at all the customer sites I visited. It saved me from many of the expenses and hassles that ordinary renters and homeowners have to deal with, and let me focus on my work, which frequently required a lot of hours to meet project deadlines. That left me with a significant amount of overtime pay and not much time to spend it, so I was able to save enough money to eliminate my student loans and car payment by the time I left the company two years later.

With some work experience and job skills on my resume, combined with a hot IT market, I was able to land another consulting job at double my salary. To me, $60k was unbelievable pay, and since I was skeptical about how long the boom could be sustained, I treated my income like lottery winnings instead of squandering it on temporary pleasures. I decided to use the money to buy my first home at age 25 because I was tired of sharing walls with other people, and I wanted a place of my own with a garage to park my car in.

The prospect of a 30 year mortgage was terrifying for me, however, and I couldn't see myself wanting to work for that long just to pay off the house. So I poured all my extra cash (after maxing out my 401k and ROTH IRA accounts) into the mortgage. Other people encouraged me to invest in companies, but I am glad I stuck to my guns.

After a year of working for the new company, I got tired of being on the road and getting paid a fraction of what I was earning for my employer, so I started looking elsewhere. I found a local company that needed someone with my skills, and signed a consulting contract with them that ended up lasting a couple of years. I charged them far less than what my former employer would have billed for my services, and in turn I received a huge bump in income. Thanks to my higher hourly rate, and the tremendous number of hours I sometimes put in to complete projects, I was able to pay off my house before my 28th birthday.

Being debt free was an amazing feeling, but I wasn't ready to quit working just yet, as I didn't feel that I had enough savings to retire on (I had a net worth of around half a million at the time). I still liked what I was doing, but I didn't want to go back to traveling, so after my contract ended I found full time employment at another local company. With no debt, I wasn't sure what to do with the surplus income that was flowing in, so I invested some of it in the stock market outside of my 401(k) and IRA plans, purchased some investment real estate, and upgraded to a bigger house several years ago. I think I first reached $1 million in (paper) assets in 2005, at the age of 33, but then the Phoenix real estate market tanked and I am in the process of rebuilding my net worth.

Some of the major influences that have helped shape my attitude toward saving include the "Affluenza" and "Escape from Affluenza" programs on PBS, and "Your Money or You Life" by Joe Dominguez and Vicki Robin. "Escape from Affluenza" was my first exposure to the benefits of simple living, and it had a significant impact on my way of thinking. I never liked being in debt and was never a wasteful person, but that show really resonated with me and helped me realize what is truly important to me, and enabled me to fine tune my spending habits to concentrate on those items. It also discussed "Your Money or Your Life" and its authors, Joe Dominguez and Vicki Robin. I borrowed the book from the library, read it from cover to cover, and started utilizing some of the ideas I learned. For example, I track every dollar I spend, and focus more on things that give me long term happiness, such as time with family and staying in good health.

I think that anyone can accomplish what I have achieved, given a proper attitude and the right approach; it just might take a little longer on a smaller income. I will get more into the specifics of budgeting, investment asset allocations, insurance strategies, and more in future posts.

Thursday, September 20, 2007

Welcome to my blog!

Looks like a lot of people are getting into this blog thing. Some of them have tidbits of wisdom to offer, and others have a lot of free time. I have a little bit of the former, and a bit more of the latter.

The purpose of this blog is to share my thoughts about different topics, including but not limited to: personal finance (saving and investing), practical tips/advice, interesting things I find on the web, and fun stuff. It's more of a hobby than a serious project, at least for now, so I don't know how regularly I will be updating this blog, but if I think of anything important to share I will try to post it here.

So sit back, kick off your shoes, and have a look around. My tips and journal entries on NetworthIQ are linked to the left. Below that are some interesting articles I've found on the web, which will be updated as I run across them. Also try the public chat room, or if you prefer, chat privately with me if I'm online.

Thanks for stopping by!