Taking A Break

In case you’re wondering, I haven’t disappeared off the face of this earth yet – I’m just on vacation on the West Coast of USA, and I didn’t have time to blog this before I left.

In the past 9 days, I’ve covered LA, Vegas, the Grand Canyon and Monterey; and I’m now on the final leg of my trip in San Francisco. Pretty much loving the Californian weather, the long drives, and the FOOD right now.

Will be back to my usual blogging routine in early September – In the meantime, here are a couple of interesting reads I’ve come across in the past couple of weeks:

1. The Big Lie About Engagement Rings – anyone thinking about proposing / getting proposed to should read this.

2. The Disciplined Pursuit of Less from the Harvard Business Review. Great article describing how we should be decluttering our lives – not just in the usual time-wasters, but also saying no to some terrific opportunities if we don’t absolutely want/need them. Kind of ties into my recent Revenge of the Ping post too.

3. How To Do Presentations That Don’t Induce Suicide – awesome presentation about… how to do a presentation

Till next week! 🙂

Never Take Financial Advice from a Supervillian

I just caught the Dark Knight Rises last week. Okay, it wasn’t a terrible movie, but it’s just riddled with plot inconsistencies that I couldn’t resolve, like (SPOILER ALERT):

1. Why is there a random-ass prison in the ground, in the middle of some foreign desert, with no warden, no food, and a bunch of prisoners cheering each other on? And how did Bruce get to Gotham in like, 2 hours after escaping from said prison?

2. Once Talia dies a terribly unconvincing death, which eliminates the bomb’s mystery triggerman, why didn’t Batman just haul the damn bomb to the sea in the first place? (which would leave him a lot more time to make out with Selina Kyle?)

3. How was Jonathan Crane (Scarecrow in the first movie) planning to exile its rich citizens in the summer? (“You are condemned to exile… by swimming!” Wtf).

Stupidest Supervillian Financial Plan Ever

But the biggest plot inconsistency for a financial nerd like myself came from Bane’s hairbrained plan to bankrupt Bruce Wayne.  (Hat tip to this article from theatlantic.com).

  1. Take over the entire Gotham Stock Exchange
  2. Hack into Bruce Wayne’s account
  3. Buy lots of puts on futures that expire at midnight.
  4. Bankrupt Wayne so he’ll have to read cheerfulegg.com to learn how to get rich again

Let’s examine the loopholes in this plan. First, there’s absolutely no reason for Bane to hold the Gotham Stock Exchange hostage in order to break into Bruce Wayne’s account. A more subtle (and less risky) plan would involve breaking into Wayne’s brokerage, which probably isn’t located within the Exchange. Or better still, hire a hacker to break into his account online – certainly affordable for Bane’s considerable financial resources.

(Okay fine – a scene of Bane carefully keying in his banking token code into gothamnationalbank.com wouldn’t nearly be half as dramatic, and wouldn’t  make for good entertainment.)

Sexy Doesn’t Always = Smart

The biggest thing I’m confused about is Bane’s decision to buy a whole bunch of puts on Wayne’s account. If you don’t know what a put is, it’s a fancy-schmancy financial instrument that lets you profit when stocks go down (yes, they exist). And buying a whole bunch of them means you make a loooooooot of money when stocks crash – which is exactly what would happen if the stock exchange is under a supervillian attack. So Bane’s plan would actually have the opposite effect of what he intended – he would make Bruce Wayne so insanely, ridiculously rich that he could have outsourced the saving of Gotham to Spiderman or the Avengers.

My guess is that the scriptwriters just wanted to include the use of the word “puts” into the plot, because they sound oh-so-sexy. But as I’ve often blogged, the sexy thing isn’t always the smart thing to do. In fact, the unsexiest things you could do in personal finance are usually the smartest moves you could make:

1. Automatically saving a fixed amount every month, increasing it when you have an income increase,

2. Dollar cost averaging into a sensible portfolio of index-tracking ETFs.

3. Automatically paying off your credit cards in full every month to build your credit score, so you’ll get a lower interest rate if you ever need to borrow to buy a car/house/business.

Not nearly half as sexy as investing in hedge funds, or studying things like “delta” and “gamma”, or trading on volatility, or holding a stock exchange hostage, but they’ve proven to work over and over again. As Ramit Sethi often says:

“Do you want to be sexy, or rich?”

The Absolute Moron’s Guide to the Euro Crisis

Came across this yesterday, and thought that it was way too awesome not to share! Presenting:

The Absolute Moron’s Guide to the Euro Crisis Part I and Part II   (Hat tip Barry Ritholtz)

Totally awesome for those of you who’ve been trying to wrap your heads around this Euro crisis thing, so you have something smart to say at that awkward moment when it’s just you and your boss in the elevator. (I didn’t do so well – today, I got stuck in the elevator with my boss and I stammered at how awesome it was that our company has an annual fire drill. Smooth, Lionel, smooth.)

My favorite parts (SPOILER ALERT):

“Also, there are still a lot of question marks surrounding the bailout — where the $125 billion will come from, what the terms of the bailout will mean for existing Spanish bondholders, and whether the troika will require Spain’s government to enforce any spending cuts.

THE TROIKA. Sorry, it just sounds like a badass weapon from Game of Thrones.”

And also:

“Anyway, after months of speculation and hand-wringing, Spain agreed to take a bailout — which some people are calling “Spailout” because it’s fun to combine words — that will help it recapitalize its banks. 

Recapitalize? Is that like when you’re texting on an iPhone and you want to type “mark” but it keeps changing it to “Mark” because it thinks you’re talking about your friend Mark and then you scream at Siri, “I’m not talking about Mark, Siri!!!”

Coursera: Free Online Classes from Top Universities

This is probably a little late, but I just stumbled onto Coursera – a website that offers free, high quality, online courses from Top Universities like Princeton, Stanford, Michigan, and my beloved alma mater, Penn. ❤

Some examples of courses offered: A History of the World Since 1300, Algorithms, Model Thinking, Social Network Analysis and dozens more.

So I think one of the key facets of a truly rich life is lifelong learning – because it makes you rich in your views of the world and of life. Snide remarks about having to complete annoying assignments aside, I’d say this is education at its best – attended only by people who truly want to learn, and not because they’re targeting a good grade or a job. I think platforms like these are going to revolutionize the education landscape – moving away from structured, syllabus-based, commodity-like obligations to organic, inspired, and customized forms of learning.

I’ve already signed up for a course starting in September. I don’t know about you, but I am super psyched.  🙂

Freshly Pressed Ping

freshly pressed

So last night, in my sleep-deprived, mentally frustrated state, I dashed off a post – Revenge of the Ping – about how the Ping totally ruined my plans for yesterday. I totally didn’t expect it to get featured on the Freshly Pressed section of WordPress.com, generating more than 5,000 hits, 74 comments and 79 followers (and counting!) in a single day! Woweeee!

Ironically, today was my biggest Ping day ever with my WordPress app buzzing every other minute and my inbox flooding with WordPress notifications. Lots of people also commented that the only way to stumble across my post was to submit to… the Ping. Oh, the irony of it all 😀

Something struck me while I was reading through the comments: We could be from anywhere in the world, but we’re all pretty much the same when it comes to situations like these. EVERYONE’S been hit by the Ping before and screwed up their plans, so don’t feel too bad about it if it happens to you. Take a breather, then switch off your phone and your chats and your email client, work on that to-do list, and hunker down and work your way through it. Guilt never got anyone anywhere.

(Pretty much everyone also agrees that the phone stack is an awesome idea, and quite a few people share my distaste for Justin Bieber’s single “Boyfriend”. So that totally made my day.)

So anyways, I just wanted to say thank you. Really. It’s superduper encouraging to know that there are actually people who appreciate the stuff I write about here. (When I first started blogging I got kinda worried that the only people who would be reading this blog is some drunk college kid trying to google how to fry an egg at 4am.) A friend told me that sometimes people just need to get reminded about the painfully obvious things that we forget – which are sometimes the ones that would help us the most.

So thank you for the encouragement and the love! I’ll keep blogging as much as I can. Leave a comment if there are any personal finance / rich life topics you’d like me to write about – I read every one 🙂