The C-Route

  How to "C" the Route to Financial Wealth for families making under $100,000 a year. Written by a journalist for more than 30 years.  

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Day 9: A great job chart

One of the best charts I have ever come across is at the U.S. Bureau of Labor Statistics. The chart provides data about almost any career in America such as average hourly wage, annual salary and job growth. For example, a cook at a fast-food restaurant averages $19,030 in annual salary while a regular restaurant cook makes $23,700. So if you work at McDonald’s, you can make almost $5,000 more by shifting to say Applebee’s. If you become very good, a head cook or chef makes on average $45,880. By comparing your skills in your industry or looking at different fields, you can find out which areas pay the higher salary. This is such a helpful chart. I wish I knew about it when I was planning my career in the 1970s.  This is Day 9 of The C-Route’s Map to Financial Happiness in 365 Days, a book to help salaried workers build wealth. Mondays “c” the route to Careers.  �-xv[�H�

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Day 17: Money can alleviate worries! Who knew?

                A popular saying is money doesn’t make you happy.                   According to a recent Gallup survey, 44% of those making less than $30,000 annually have “high worry” on financial issues. This drops to 6% for those making $75,000 or more.                 It’s obvious that money can alleviate your worries. So when we hear people say that money doesn't matter, take it with a grain of salt.                 It doesn't mean your financial fears go away when you make more money.                 Fifty percent of U.S. adults are “very” or “moderately” worried about 3 or more financial issues, compared to 49% a year ago and a height of 61% in 2012, the poll said.                The biggest concern is not having enough money for retirement, 60%, followed by not having enough money to pay medical costs of a serious accident/illness, 55% and not being able to maintain the standard of living, 46%.The lowest concern, 20%, was not being able to make the minimum payment on a credit card.                  One more point: Thank god we live in America.                 Notice what is missing -- we don't worry about eating that day or a roof over our head.                  The concerns in the Third World are quite different, starting off with where to get that day's meal. After living for a decade in the Third World, I can assure you that many people also worry about crimes like robbery and kidnapping or bribes demanded by police or other govt. officials. Then there is the fear of wars and becoming a refugee.                 When our biggest financial concern is retirement, life in America is much better than we realize.                 This is Day 17 of the C-Route’s Map to Financial Happiness in 365 Days. Tuesdays focus on costs and how to control them. Tomorrow examines Cons and how to avoid them. rtt":48� u*�y$

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Day 16: Why other places cannot emulate Silicon Valley

          I see many press releases from cities and universities declaring they are the next Silicon Valley. They hire talented computer science professors, design modern degrees, build nice business parks next to the schools and create special tax incentives. They believe this will replicate the success of the community surrounding Stanford.            Since I covered technology companies for 15 years and wrote articles about why Silicon Valley became so, I think these are the three key reasons that set Stanford apart.             The first is the expectation that young students are going to start companies not merely as class exercises but ones that will become successful.            The second reason is that Stanford doesn't demand a portion of future profit from students and professors. By contrast, a professor at the University of California complained to me that if he invents something while sitting on the toilet, the school wants a royalty.              The third is Stanford permits its professors to invest in their students’ start-ups. These professors get a head start over venture capitalists at spotting the most talented students. That is how David Cheriton came to invest $100,000 in Larry Page and Sergey Brin, who became the founders of Google. Cheriton is now known as Professor Billionaire.              I haven’t heard of other universities encouraging or even permitting their professors to invest in their students’ businesses. I continually ask myself, why the University of California at Berkeley, which is just 50 miles away, hasn't been able to duplicate Silicon Valley's success.              If a university claims to be the next Silicon Valley, ask the school if they allow the professors to invest actual money in their students. That is a school with potential.           This is Day 16 of The C-Route’s Map to Financial Happiness in 365 Days. Mondays “c” the way to improve our careers. 14dp��c�~�

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Day 15: The basics to being a father

       My 91-year-old Dad once confided to me that he viewed his role to his children as three things: 1.) provide a roof over our heads 2.) food on the table 3.) an education.          Nowadays this is considered old school and people may wish their dad had done this or that as well. On the other hand, there are also far too many stories about children growing up without a father and fathers complaining about child support payments.           I keep reminding myself of what basketball announcers say about a player: His fundamentals are good. In other words, the player understands he must master the basics before he can become great.            These basics are the fundamentals to building wealth not only materially but spiritually.            We don’t build wealth by shirking our responsibility towards our children. What is the point if we don’t bring along our children so they can have a better life? Children are basic building blocks to a happier and thus richer life.             This is Day 15 of The C-Route's Map to Financial Happiness in 365 Days. Sundays "c" counsel, or where to find good advice.

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Day 13: Why a shark hates real estate

       “Real estate is a terrible investment,” Kevin O’Leary, one of the star investors of “Shark Tank” where he is known as Mr. Wonderful because of his dour personality, said on CNBC.          O’Leary doesn’t like real estate because of tremendous fees – up to 6% of the value of the property – needed to sell your home. On Wall Street, traders argue over 1 or 2 basis points, which are 1/100ths of a percentage point. In real estate, the going rate to sell your property is 600 basis points.           In my view, real estate isn’t a terrible investment. It’s more like the second-string quarterback – important as a backup but not as good as the first stringer. The S&P 500 Index has grown 10%-11% for the past 100 years while real estate is known as staying close to the rate of inflation. That means over time, Wall Street will build more wealth for you than your home.          A $5,000 investment over 30 years at 10% annual increase grows to $87,247. By contrast, a 3% annual rate on a $5,000 investment means $12,138. Now a 3% return is better than renting, which is zero percent return.          I like real estate and encourage everyone to buy their own homes and maybe even buy a few rentals nearby. Just be aware of the pitfalls. Here is a fun calculator to estimate returns.           This is Day 13 of the C-Route’s Map to Financial Happiness in 365 Days. Fridays “c” Castles, aka real estate, the second best way to build wealth.  f8Fgf8Lx��h�yy

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Day 12: Wall Street Bad? More  like supermarket

What is Wall Street? Think of it as like a supermarket, which offers thousands of different products from thousands of vendors.  There are four main components. The meat section is equities aka stocks, the Dow Jones, the S&P 500. This is where many media articles concentrate because it’s easy to see a stock price going up or down. Its worldwide value is about $70.7 trillion, at least as of this morning. The vegetable section is where we can find commodities like oil, gold and even real vegetables like corn and fruit like oranges. It’s very hard to know the size of this market because there are so many contracts among private parties. These contracts, often known as derivatives, have a bad name among some but they are usually just a method to lock in future prices. In the 19th century, the markets used to crash because crafty traders would know farmers needed money in the fall before they could collect money for their harvests. It’s a key reason the U.S. Federal Reserve came into existence to regulate money flows. The bread section is where we find the bonds. This looks boring at first but did you know bonds can trade just like stocks? The media doesn’t cover it as well as stocks because bond prices aren’t always well known. Also, it’s boring to read how traders get excited about basis points, which are hundredths of a percentage point; bond traders realize each basis point can mean thousands of dollars of extra profit. Bonds are the heart of Wall Street with a value of about $150 trillion market, twice the size of stocks. Currency is the spice section. Want to spice up your bond? If you bought a U.S. bond last year in a foreign currency, your investment just soared about 20% because the dollar appreciated as a currency. It’s a great twofer. About $5.5 trillion in currencies are traded daily. Wall Street is not just a street in southern Manhattan. It’s anywhere capitalism is allowed to flourish. This is Day 12 of the C-Route’s Map to Financial Happiness in 365 Days. Thursdays focuses on Currency, aka Wall Street.  

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Day 10: Shhh! The government doesn’t want you to know that 21% of your income goes to them

      Every month, the government comes out with a report on the cost of living. The federal government knows in great detail where we spend our money and thus calculates inflation.        What’s odd and very seldom reported is that the government doesn’t publicize data on how much an average person spends on taxes.          While the government tells us in detail how much we spend on food or rent or mortgages, it seems to purposely hide how much an average family has to pay in taxes. Believe it or not, the Bureau of Labor Statistics doesn't include taxes in its surveys of annual expenses.              Twenty-one percent is the number to keep in mind. That is what an economist for the Bureau of Labor Statistics told me when I asked what the average American pays in taxes as a percentage of his or her annual salary.              It’s not just federal tax. It’s also social security, Medicare, disability insurance, property, state, auto and even the park entrance fee. I recently learned that 64 cents of every gallon of gas I purchase in California goes to taxes, according to the Orange County Register.              Nobody likes taxes but we pay our share to maintain a certain level of stability and civilization. I’ve visited countries where no one pays taxes. These are places where crime is rampant, rivers overflow with sewage, streets are full of potholes and life is miserable in comparison to America.              That doesn’t mean we cannot manage to reduce our taxes in legal methods.               The government will never tell you what you can legally write off for your career advancement.  A good tax accountant should be able to tell you and save your family at least a few thousand dollars every year.                Tax preparation, which costs about $300 to $500, can itself can be written off. If your tax situation doesn't change much year to year, consider hiring the accountant for one year and then using it as a template for the next two to three years.                 This link gives a sense of what we pay in taxes.                 This is Day 10 of The C-Route's Map to Financial Happiness in 365 Days. Tuesdays “c” ways to control Costs. Wednesdays “c” the Crooks and how to avoid them. 

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Day 9: A great job chart

One of the best charts I have ever come across is at the U.S. Bureau of Labor Statistics. The chart provides data about almost any career in America such as average hourly wage, annual salary and job growth. For example, a cook at a fast-food restaurant averages $19,030 in annual salary while a regular restaurant cook makes $23,700. So if you work at McDonald’s, you can make almost $5,000 more by shifting to say Applebee’s. If you become very good, a head cook or chef makes on average $45,880. By comparing your skills in your industry or looking at different fields, you can find out which areas pay the higher salary. This is such a helpful chart. I wish I knew about it when I was planning my career in the 1970s.  This is Day 9 of The C-Route’s Map to Financial Happiness in 365 Days, a book to help salaried workers build wealth. Mondays “c” the route to Careers.  �-xv[�H�

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Day 8: The New York Times financial columnist did what?

         I often read financial advice articles and books to pick up tips and share.          Sometimes things just jump off the page.           For example financial advice columnist Carl Richards, famous as the Sketch Guy in The New York Times, admits in his new book that he lost his house during the financial crisis.           “I’m a financial advisor. I get paid to help people make smart financial choices. I should have known that we couldn’t afford a house that cost almost twice what we’d originally set out to spend,” wrote Carl Richards in his book, “The One-Page Financial Plan.”           On the one hand, Richards’ admission is a writer’s technique to gain empathy from readers, to say he’s just as capable of making mistakes and here’s how the reader can avoid making the same error.           The problem is every good financial analyst knows how to give you a cushion to avoid bad things -- and losing your house is one of the most horrible financial events to experience.            Reading this book is like taking a gun safety course from an expert who had just shot himself in the foot. Your confidence in his advice plummets.          This is Day 8 of The C-Route's Map to Financial Happiness in 365 Days. Sundays “c” Counsel, or how to spot good advice. Mondays “c” Careers.

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Day 6: Rah, Rah, go real estate! Hooray for the home team!

              Real estate has a wonderful reputation for a very good reason – You are the king or queen of your own castle. It has 4 ways to increase your wealth – amortization, appreciation, tax break and eventually a rental if you go that route.                 About 30% of Americans believe real estate is the best long-term investment, leading gold (24%), mutual funds/stocks (24%), savings (14%) and bonds (6%), according to a 2014 Gallup poll.                 The truth is real estate has too many cheerleaders like Donald Trump and not enough sober analysis. I rarely see perceptive critiques of the industry in daily newspapers because real estate to this day is a big advertiser. There is an old rule in journalism – don’t diss the advertiser.                  As you follow this blog, you will learn why real estate is the second-best investment for regular workers to build wealth, behind 401ks and related retirement funds.                 This is Day 6 of the C-Route’s Map to Financial Happiness in 365 Days. Fridays “c” Castles, aka real estate, because the weekends often have open houses which can make anyone drool with envy. Tomorrow “c” fun things to do because life isn’t all about building wealth, but living an entertaining life. Meanwhile, the real estate calculators at the Mortgage Professor’s website are very helpful:. Ado)�t�Ӡv

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How to master the Big Bad Scary Wall Street

Wall Street sounds scary.Sometimes it really is.  It sounds complicated. Sometimes it really is. Other times, it’s as simple as knowing what price you paid for the stock and seeing the current price to know if you have a profit or a loss. In simple terms, Wall Street is a way for people with excess cash to loan or invest in people who want to do things like start a company to make computers or a town that wants to build a road or a farmer who needs an advance on his crop. In the long run, Wall Street is the best way for average worker to build wealth. That’s right. Wall Street beats the appreciation on your home. It’s far better than letting your money sit in a bank’s savings account. It is the key route for those of us on a salary to build the wealth of our family in the long run. Say you are making $50,000 annually, if you put $5,000 into a 401k with a 50% match from your employer, at 8 percent return you will have saved $135,500 within 10 years and $1.19 million in 30 years. If your spouse does the same, that is $2.38 million. Here’s a calculator to play with to determine the effect of saving in your 401k. This is Day 5 of the C-Route’s Map to Financial Happiness in 365 Days. Thursdays “c” Currency, aka Wall Street. Fridays “c” Castles, aka Real Estate, the second best way.  

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Remember the scene in the movie “Taken” where the father on a cell phone call advises his 18-year-old daughter to hide under the bed in her Paris apartment and then informs her that the bad guys will find her. Just like the movie, I guarantee that the scamsters will find you. I’ve reported...

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Day 3: How do we know if our costs are out of whack?

            A good way is to compare our expenditures with the average American household of 2 or more people, which spent about $52,000 last year.  The biggest costs were housing, 20%, followed by transportation, 18%, healthcare and health insurance, 12%, insurance and pensions, 11%, utilities, 7.4%,         Entertainment was about 5%, or $2,560 – which is about $213 a month while food was 13%, or $555 a month.         If you find yourself spending $850 a month on entertainment, or about 20% of your income, or $1,300 at the grocery store, around 30%, than you are spending far more than the average American family.         Say you are wondering if you spend too much on clothing. The average American family spent about 3.2% of its income on apparel, or about $138 a month. So $138 a month for a family of 2 or more is average. And much as guys resist, women know we need new clothes every year.           Use these percentages as a guideline and then tweak to your family size, income and location.  Here is the official press release on American expenditures, released in early April.        This is Day 3 of the C-Route’s Map to Financial Happiness in 365 Days. Tuesdays “c” the way to look at Costs, while Wednesdays “c” how to spot the Crooks, who I guarantee will find you one day. 

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Day 2: How much will you earn n your lifetime?

So many of us live from paycheck to paycheck. Yet, if we think over the long haul, this amount can accumulate. Take a 30-year-old making $50,000 a year, getting a 2 percent annual raise until retiring at 65. That’s $2.5 million over the next 35 years.  We’re making much more money in our lifetime than we ever realize. A 5% pay raise means not only $2,500 for the coming year but $2,500 extra for every year thereafter. Or a new job that pays 10% more a year means $5,000 extra dollars in your wallet every year. Over time, it can make a huge difference. This is Day 2 of the C-Route’s Map to Financial Happiness in 365 Days. Mondays is to “c” the route to a good career while Tuesdays “c” our Costs. Here’s a calculator to play around with to figure out your life’s income. , pa%[��aI�

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Welcome to my newest project: Day 1 of the C-Route’s Map to Financial Happiness in 365 Days. Every day for the next year, I will post a short item on Tumblr around this time to discuss a “C” Route on financial advice. Why do I do this? I know what it’s like to be poor and wondering what...

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Day 7: Breaking Cool

         Life isn't just about building wealth. It’s how to enjoy yourself day in and day out through things big and small – the Cool things.          These Saturday posts during the next year will make recommendations about great TV shows, movies, audio books and places to visit.          Our college and high school teachers of English and history have tried to teach us the classics. Not to dish Hemmingway, but as we mockingly say in California, “That’s history!” Right now in this millennium there is a lot of Cool stuff going on such as Hollywood.          I’ll start with my all time favorite show: Breaking Bad.          It’s the story of Walter White, a high-school chemistry teacher who learns he is dying and decides to cook meth to leave money for his family. He enlists the help of his former student Jesse, who certainly is the stereotype of the local drug dealers I knew while growing up. To complicate matters, Walt’s brother-in-law is a DEA agent.          The show isn't about financial advice, although there are a few pointers. The storage room with a pallet of cash is a real-life reminder of just how difficult it is to launder money if thinking of doing something illegal.           Many of us go to great effort to build our family -- Walter's explanation of why he made meth is a reminder of how all of us calculate the limits.         It’s a delightful story on so many levels. You can catch all 5 seasons on Netflix. Heres the official website. This Mariachi intro to one show is one of the coolest TV scenes ever.          This is Day 7 of the C-Route’s Map to Financial Happiness in 365 Days. Saturdays “c” he cool things in life. Sundays “c” where we get our Counsel, our advice.  pdy":t yvWO

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Day 6: Rah, Rah, go real estate! Hooray for the home team!

              Real estate has a wonderful reputation for a very good reason -- You are the king or queen of your own castle. It has 4 ways to increase your wealth -- amortization, appreciation, tax break and eventually a rental if you go that route.                 About 30% of Americans believe real estate is the best long-term investment, leading gold (24%), mutual funds/stocks (24%), savings (14%) and bonds (6%), according to a 2014 Gallup poll.                 The truth is real estate has too many cheerleaders like Donald Trump and not enough sober analysis. I rarely see perceptive critiques of the industry in daily newspapers because real estate to this day is a big advertiser. There is an old rule in journalism – don’t diss the advertiser.                  As you follow this blog, you will learn why real estate is the second-best investment for regular workers to build wealth, behind 401ks and related retirement funds.                 This is Day 6 of the C-Route’s Map to Financial Happiness in 365 Days. Fridays “c” Castles, aka real estate, because the weekends often have open houses which can make anyone drool with envy. Tomorrow “c” fun things to do because life isn’t all about building wealth, but living an entertaining life. Meanwhile, the real estate calculators at the Mortgage Professor's website are very helpful:. Ado)�t�Ӡv