I’ve been thinking a little about how financial advice differs based on the target audience.  Men’s and women’s magazines, for example, have very different types of advice between their pages.  A typical financial column in a women’s magazine may be titled, “10 Reasons Why You Need an Emergency Fund,” and a typical column in a men’s magazine might be called, “10 Hot Tech Funds You Need to Invest in NOW!”  Why the difference in advice?  Why do they assume women don’t know enough to have even the basics taken care of?  Why do they assume men are only out there to chase returns?

Of course, there are inherent gender differences.  And there is no reason to deny or ignore them in a column about money.  I think it’s safe to admit that women tend to be more concerned with safety of principle than men.  They will take steps to ensure their money will be there when they need it.  On the other hand, men tend to be more risky than women.  They will take steps to ensure their money grows.

But money is gender neutral.  Interest compounds at a known rate, completely blind to the gender of its owner.  And all people, regardless of gender, should have an emergency fund and be investing for the future.  Both safety and growth are necessary if the goal is to have more money later than you have now.

Advice on safety is only one small part of the advice women need.  And usually, safety is the part they already understand very well.  Likewise, few men need to be advised to take more risk with their portfolios.  It’s in our blood.  What we all need, however, is a little more balance.  Being safe is silly if you actually lose ground to inflation.  And being risky is equally as silly, if you lose your principle to dreams of wealth.

So when you come across a guru wanting to tell you what to do with your money, pay special attention to what isn’t being said.  It may be the advice you need the most.

This column originally appeared in the October 24, 2007, edition of the Greenhorn Valley View.

This is the column I wrote for the October 17, 2007 edition of the Greenhorn Valley View.

You’ve often heard that you should save your money rather than spend it, because you’re going to need that money down the road.  You also know that when you invest money it will grow, because of the interest, dividends, or capital gains.  But did you ever wonder exactly how big your investment could get?  If you have a long period of time, and can earn a decent return, your money could grow significantly.

For example, I’m 30 years away from retirement (at least).  If I can earn 10% on my money over that time, I can turn a small amount today into a huge amount then.  I could take $10 right now and go buy a cheeseburger and a coke.  If I did, I would not just be taking $10 out of my wallet, I would be taking $174.49 away from my future self.  Now that’s an expensive cheeseburger!  You can figure out time value of money problems like this using a business calculator, or you can find several good calculators on the Internet, and if that fails, you can find a special spreadsheet on my blog that figures this out for you.

Some more examples:

Instead of spending $4 on a latte, I could have $69.80 at retirement.

Instead of spending $50 on an XBox game, I could have $872.47 at retirement.

Instead of spending $399 on a new iPhone, I could have $6962.31 at retirement.  And that doesn’t count the service plan for the iPhone.

Instead of spending $2000 on a vacation, I could have $34,898.80 at retirement.

Obviously, you won’t want to go completely spartan and never spend any money on anything.  Nevertheless, understanding how much money you’re taking away from your future self could easily sway your purchasing decisions.

I wanted to put the actual spreadsheet up here, but WordPress won’t let me upload a spreadsheet.  So here’s an image taken from the spreadsheet.  If you’d like the original spreadsheet, just email me.

Generosity is a virtue that is largely undervalued by society as a whole. There are spiritual reasons for being generous, of course, which you can discover at your favorite house of worship. Today, however, I’d like to focus on the many practical benefits of being generous.

Being generous will free you a little from the burden of materialism. Have you ever noticed that the more stuff you have, the more it taxes you mentally? When you own more things, you have more things to take care of, more things to clean, more things to fix when they break, and more things to replace when they can’t be fixed. On the other hand, if you had fewer things, you’d have more time for relaxing or productive activities. Materialism will have less of a grip on your life.

At the same time being generous will cause you to feel better about yourself. When you give to another needy individual, you will have relieved them of a little of their worries. Imagine the pride of being someone else’s knight in shining armor! Or, perhaps you give to a volunteer organization that takes care of orphans. Even a meager gift can help out dozens or even hundreds of people who are less fortunate than you.

Another benefit of being generous is that your focus will necessarily shift from yourself to the object of your generosity. You will be less self-centered because you will be interested in the other person or charity. Because you’ve given them money, you’ll want to know how they’re getting along. Maybe your gift was a huge blessing to them, or maybe they could use a little more help. Because you want to know, you’ll spend more time worrying about them and less time worrying about yourself.

And finally, let’s just be honest and admit that being generous will have the rather Machiavellian effect of making people like you. You can consider yourself to be buying future favors. The people who receive your gifts will be forever appreciative, and they will be more likely to respond when you have a need of your own.

So be generous. Be so generous that you aren’t even sure how you’ll get by without all that extra money. It will be a highly profitable exercise.

This post originally appeared in the October 10, 2007 edition of the Greenhorn Valley View.

I just discovered an interesting blog called It’s Write Now, which is about every aspect of writing except the writing part!  (Seriously.  It’s not boring.  Check it out.)  They’re having a contest with a new iPod nano, 8 GB, video, as the top prize.  Check out the contest here.

I don’t write about writing very often.  But as a blogger, I am, of course, interested in it.

I’ve talked a lot before about how debt robs you of your future. To go into debt is to presume that you will have the money at some later point in time, a point at which you would probably rather have that money for other things. But here’s another twist on that same idea: any time you buy anything, even if you pay cash and incur no debt, you are robbing yourself of that same future.

I hear many complaints from people who don’t like being advised to live a frugal lifestyle. “You have to have some fun now,” people say. “I don’t want to live like a miser just so I can go to the grave with a big bank account,” others moan. “Mr. Smith” enjoys reading, double tall sugar free vanilla breve lattes, and eating out. In a typical week he spends $25 on a book, and $75 in lattes and restaurant meals. Mr. Smith complains that he’ll never be able to retire and feels bound to his job. But every week his bank account bleeds $100. Because Mr. Smith wants to “have some fun now,” he is deliberately postponing the day when he can leave his job behind.

What are your dreams? Do you want to buy a house? Do you want to take a big vacation? Do you want to retire early? Do you want to start a business? Whatever your goal is, ask yourself if this latte is worth putting in another hour at work. Or how about this question: “Is being frugal now going to help me reach my dream sooner?” If so, is that a trade you’re willing to make?