Articles by Frugaling

Picture All Your Worldly Possessions

I saw this picture for the first time the other day. It shocked me. These were all the possessions that this man had. Rather than feeling demoralized, he was calm and honorable in his actions. The items before you represented everything important to him: sandals to walk around, a watch to tell time, a foundational text for focus and intellect, and glasses for the simple necessity of sight. Stripped of everything extraneous, this man could be freed to become one of the greatest heros of all time. Before I talk about the owner of these possessions, let’s talk about our possessions.

What does your picture look like?

I don’t know whether to be saddened, inspired, apathetic, neutral, and/or happy, but I can now fit everything I own into a single room. Walking through my apartment, I almost expect to see a tumbleweed race across the linoleum floor. It’s barren. I don’t necessarily feel exceptionally positive, as there’s a societal expectation for stuff that I cling to.

Magazines like Dwell and websites such as Apartment Therapy emphasize how home designs affect emotionality. The model home is well-kempt, orderly, and colorful — energizing its inhabitants and providing a sense of calm. But despite these stereotypes and assumptions about design, by paring down my accoutrements, I feel calmer. With the extraneous emptied, I can focus and save for what’s important.

Even though I can fit everything into a room, it’s far greater than the preceding picture. Could I reduce my possessions even further? Perhaps.

What if your house flooded tomorrow?

This past weekend I traveled with a friend to Minnesota. It was my first time in the Twin Cities. I loved every minute. Before I left, I packed and scanned over my apartment.

Every time I travel, I look over the bag and apartment for missing items. I ask, “What am I forgetting?” Only one thing came to mind: I heard that my area of town may be flooded when I return. I moved two cheap electronics above the floor and left.

Leaving rapidly and with such efficiency made me think:

That was faster than ever
I feel really free
I want to do that again and again and again

In the past, I worried about the condition of my possessions. Would they be safe? How long could I be away from home? This time, I didn’t hesitate — these things wouldn’t hold me back from hopping in my friend’s car and celebrating the holiday. If my house flooded — thankfully, it didn’t — I would’ve probably suffered some losses. But in the end I would be okay.

How do you make your picture look like that?

Many people own TVs, cars, and houses. The picture frame doesn’t seem to fit our countless commodities and material goods. We’ve amassed stuff to fill our homes and heads. We can’t even collect and commingle it all for a friendly picture. This leaves us open to feeling loss and ache.

The photo above is a collection of all Gandhi’s worldly possessions. Gandhi fueled a movement for Indian independence from British rule. His message was of peaceful civil disobedience. Today, he’s an inspiration for civil movements around the world. He only had about 14 or 15 items.

How many things do you need to live the life you want? How many products do you need to be happy and live with purpose? Oftentimes, buying more products limits our ability to live meaningfully.

When we crave for more than the picture frame can hold, money must be made. Suddenly, we are working harder, longer hours to consume more. It can come at the cost of our free time and life we want to lead.

Become A Corrupt Banker, Avoid Prison

By Frugaling 3 Comments

Flickr Photo Alcatraz Island Prison — Photo: Alcatraz | Credit: Jonas Bengtsson

Drug trafficking involves “cultivation, manufacture, distribution and sale” of illicit substances. Money laundering practices are utilized to fund terrorist regimes, evade taxes, and circumvent regulatory bodies. Nuclear proliferation occurs when fissionable materials, weapons, and/or knowledge is transferred to another country. If I committed any of these atrocities, I’d be jailed for life, killed, or on death row. If I assisted these assaults on democracy as a banker, I’d be enjoying a little vacation and bonus check.

In 2007-08, we entered a massive recession and crisis due in part to mortgage manipulation and banking maleficence. Last year, JPMorgan settled with the federal government for $13 billion. Attorney General Eric Holder suggested that their investigation showed that the company’s “conduct” was largely responsible for the mortgage crisis.

A few years ago, LIBOR was heavily manipulated. It’s a $360 trillion market responsible for setting borrowing rates around the globe. In 2012, Barclays Bank paid the U.S. $453 million to settle over severe market manipulation. The government found that the bank “manipulated key interest rates.” Later that year, UBS was fined $1.5 billion for similar charges over LIBOR.

In July 2013, JPMorgan paid $410 million for manipulating energy prices through the Midwest and California. JPMorgan didn’t even need to admit guilt in this claim:

“The bank neither admitted nor denied the violations, but said it would work with outside counsel to review its policies and practices in the power business.”

The Sinaloa Cartel, considered the most powerful drug trafficking cartel in the world, is known for brutal beheadings and murders. For years, they banked through their friendly HSBC branch — transferring hundreds of millions in blood money. For these classic money laundering practices, HSBC was forced to pay up:

“The Department of Justice levied penalties and forfeitures of $1.9 billion on the bank. Of course, with $2.6 trillion in assets, for HSBC this represented a man with a hundred dollars in his pocket paying a fine of seven cents.”

In May 2014, Credit Suisse, was fined $2.6 billion dollars for their involvement in helping Americans evade taxes.

“Credit Suisse bankers aided thousands of wealthy Americans in concealing their money from U.S. authorities, the Department of Justice said. The bank helped American clients set up shell accounts to shuttle their money overseas and then solicited false IRS documents to make the accounts seem legitimate.”

In regards to these fines and penalties, Attorney General Eric Holder was quoted saying, “This …shows that no financial institution, no matter its size or global reach, is above the law.” Even though Holder suggests that financial institutions aren’t above the law, these penalties rarely phase the companies and personally responsible parties walk freely. It’s setting a frightening example.

On June 30, 2014, BNP Paribas, a French bank, was fined $8.9 billion. The case asserted that BNP helped blacklisted countries like Iran and Sudan bring money to the States. As the New York Times reports, “not one BNP employee was criminally charged.” The company said this would not hurt their core businesses and they had enough to pay the fine. Effectively, a profit speedbump — merely a cost of doing illicit business. Their stock was up after the verdict.

We are failing to properly police some of the worst among us. Most bankers and executives that are closely linked and responsible for these laundering and racketeering charges won’t see the inside of a prison cell. They should. Bankers shouldn’t get a pass when they are guilty of laundering money for blacklisted governments and cartels.

The government is modeling a dangerous example for future bankers and companies. If you’d like to commit wire fraud, launder money, and make millions of untouchable, evaded dollars, enter the financial industry. Instead of jailing these atrocious members of society, the U.S. government is the mafia boss looking for their cut. If you have enough money to pay up, you won’t go to prison. Once the federal government gets their blood money, the banking game of roulette continues.

How Amazon Prime Membership Helps Me Go Without A Car

By Frugaling 9 Comments

Amazon.com Boxes Prime Shipping — *Photo: Carl Malamud/Flickr*

Two weeks without a car. What a crazy feeling! Every day I’ve experienced a sort of dull, phantom-car syndrome where I imagine driving somewhere, and then realize I don’t have a car. But each time, I feel comfortable with the decision I made to sell the car. Now, the trick is learning to live with less.

Oddly enough, it doesn’t feel like I’m compromising anything. I’m saving money, investing, and beginning to budget for a strong financial future. I think many people fear that not having a car will be restrictive, but it’s only been freeing for me.

Today, I wanted to highlight two essential Amazon products that I’m now using without a car.

1. Amazon Prime Membership

A few years ago I joined Amazon Prime with a student discount. It was under $70 for a year of two-day shipping, Kindle library books, and TV shows. I took advantage of a 6-month promotional trial, too. It was amazing. But after a couple years, I decided to cancel my membership.

With a car, it just made more sense to go to the local store. Since then, Amazon’s prices have been falling. And without a car, the whole cost curve changes. I’m willing to spend a little bit more on products to save a lot of time and money on auto payments.

There are some products that Amazon excels at delivering. For instance, on my bike, it’s not possible to bring home bulk supplies of toilet paper and towels. I’d be stuck buying 4 rolls at a time, at exorbitant prices. Instead, I order a 40 pack online. It’s delivered straight to my door within two days, too. Amazon is still offering a 6-month trial for free and it’s the best deal out there.

Here’s what I like:

Reliable service and amazing customer support
Two-day shipping for any amount of items
Free access to TV shows and movies (no need for a Netflix membership!)
A wealth of Kindle Library books that can be checked out for free
Bulk items delivered at comparable cost to local stores

2. Amazon Store Card

Amazon beefed up the benefits to their store card, and I decided to apply for it. The Amazon Store Card is only for use on their website. While it offers special financing deals for certain expensive products, that’s not how I’m using it. See, if you don’t use the financing offers, it acts like a rewards credit card.

At the end of every statement month, I receive a 4% credit on all my Amazon purchases. And when I say credit, I don’t mean a gift card. It’s cash back. Now, I’m saving 4% off every purchase and combining that feature with Amazon’s incredible Prime shipping benefits. It makes going car-less effortless.

Here’s what I like:

Easy to apply for and get the credit card, as it doesn’t require especially high credit rating
Offers an immediate $20 credit on your next purchase
Provides a 4 percent discount on all purchases, as a statement credit
Automatic monthly payments can be setup for hassle-free service

I Am Jason Vitug, Founder Of Phroogal, And This Is How I Work

By Frugaling 7 Comments

Over the last couple months I’ve interviewed a growing number of top bloggers and writers to get their input on personal finance issues (e.g., the founders of Budgets Are Sexy, The Broke And Beautiful Life, Frugal Rules,Debt Roundup, and Modest Money). Today, I have another terrific interview!

Jason Vitug is the founder of Phroogal.com. He worked in the financial services industry for nearly a decade before he founded Phroogal. His website features a host of personal finance tools and a specialized search engine for financial knowledge. On top of starting this resource, he also maintains a popular blog, too. Jason’s definitely one of the top personal finance writers on the Internet. Thanks, Jason!

What inspired you to begin Phroogal?

I worked in financial services industry for close to a decade — most recently as an executive for a credit union in Silicon Valley. It was the years working in banking and exposure to the technology startup world in the Silicon Valley that converged to bring life to Phroogal.

At the credit union, I was responsible for raising awareness to the benefits of credit union membership and I strongly felt financial education would be a key differentiation. I traveled around the country and championed workplace financial literacy at various Fortune 500 companies.

Afterwards, I decided to take a break and clear my mind. I chose to travel. I ended up backpacking around the world for 12 months. I explored 20 countries in 12 months in 2012. It was in my sixth country on top of this 8th century temple: I thought, “I’m living my dream. Why was I the only one here?”

Eventually, as I continued to travel, I wrote down ideas. The epiphany I had on top of the temple began to make sense. It wasn’t about the amount of money one had — it was how one used money to live life rich. It boiled down to education. The more you know about personal finance the better financial decisions are made to support one’s dream. Then, I set out to change that and build Phroogal.

How did people (friends, family, etc.) react when you first started?

My family and close friends were very supportive. They’ve seen me achieve many of my goals; such as, finishing my MBA, becoming an executive before the age of 30, and backpacking around the world.

They were excited that I wanted to finally do something on my own that had significant potential to help millions of people including them. Additionally, my old coworkers were very supportive. They cheered me on when I announced what I was doing.

What was your experience with design, code, web work prior to starting your site?

I’ve dabbled in websites before, but had limited knowledge of HTML. However, in my professional career I was part of many projects that involved application development. My job at the credit union exposed me to design elements, more HTML programming, general user experience, and interface design. Marketing and business development fell under my supervision and it was important for me to understand the full capabilities of program languages and design to get the most optimal results on marketing campaigns. I taught myself and participated in as many free webinars. At first to learn the lingo; eventually, to know what was possible.

What advice would you give to those thinking about starting their own site?

It takes a lot of time and preparation to get it right. But, getting it right doesn’t matter if you don’t start.

Have a vision. It’s also important to develop the mission and set the goals of your website. Understand the problem you are trying to fix and the solution you’re offering. Then, start thinking about how you’re going to execute on that solution and what features or tools are needed. How you go about realizing your vision will change so be open to different opportunities. You’ll discover what your target market actually wants and a better way to deliver it.

Work hard and then work harder. It’s not a “set it and forget it” or “if you build it they will come.” It’s not going to be easy, but it can be as rewarding as you want it to be.

How do you make money from your site?

Currently, we aren’t making money from the website. I have a long term vision I am working towards. I had the opportunity to monetize the website because of the traffic we have but it began to take us off our mission.

My mission is to solve financial incapability and illiteracy. I don’t want to make a quick buck and take me off course. For now, the focus is to grow the knowledge base and users.

Jason Vitug of Phroogal — Jason enjoys a beautiful white sand beach, while drinking from a coconut and eating mangos. Amazing!

What do you think you’ve learned from your readers and fans?

Our community really loves reading personal stories around money. I started out blogging by answering questions without much personal anecdotes. I thought quick, short answers would suffice but people remember stories and they can take the most important pieces and incorporate into their personal situations.

How can somebody in lower incomes best overcome financial hurdles and prosper?

Having less income has more challenges but increasing that income doesn’t change financial situations. It only grows accordingly. When I was traveling around the country I would meet production employees making less than $40,000 a year who owned their home, had savings and no debt. On the other side, I would meet senior level folks who made $250,000 a year but was in debt for $600,000. So, who is wealthy?

The best piece of advice is become more knowledgeable about money today. Don’t wait till the “when I have more money” moment. Good financial habits lead to better decisions and better opportunities.

Who are your financial role models?

I grew up listening to Suze Orman. I liked her in your face and dramatic flair for money. As I grew older, I started listening to everyday people I would meet at my retail banking job. Everyone had some sort of financial situation or advice that I learned from and carry on till this day.

I’ve kind of learned hard lessons and took in whatever people shared with me. When it comes to investing, I look up to Warren Buffet’s philosophy by investing in things I understand. With philanthropy, I look up to Bill Gates in his mission on education and giving back.

What personal finance sites do you read?

I read a bunch of personal finance blogs. I think about 20 that I actively read and at times comment. On occasion I’ll read Daily Finance, Reuters or USNews. But, I’ve found my twitter feed to be a great source of discovering what’s trending today and what my connections are buzzing about.

What else would you care to share with the readers of Frugaling?

I want to leave off with saying how important it is to seek knowledge. Knowledge never gets old. It evolves. It’s really important to make sure your constantly seeking information that can better your situation. The first step in becoming more knowledgeable is by asking questions. They don’t even have to be the right questions to begin with but the more you do the more you begin to understand.

Check out Jason’s website here.