If You Need Stocks, You Can’t Afford Them

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According to economist Zvi Bodie. In a Money magazine article he says that if you need the high return of stocks to reach your goals then you can’t afford to invest in stocks. You should read the article to get all the details but this is a general summary of what he says. He states that stocks are too risky an investment for retirement investing and suggests a portfolio of TIPS instead; you should only invest in stocks what you can afford to lose. He also says that you should save 20%-30% of your income or more so you will accumulate enough money for retirement despite not having the higher returns from stocks.

This is an interesting point of view and I can agree with it somewhat. As he states when you are saving for retirement you can either sacrifice by having a lower standard of living now, working longer, or taking more risk in your portfolio. If you are able to maintain a low standard of living and save a large percentage of your income than the returns you receive are not as relevant as when you are saving only 10% of your income.

Personally, I am still going to be investing in stocks. They are risky but since I have started saving late in the game and don’t have much income I need the high returns of stocks to accumulate enough money to retire. Even if I were young and just starting out I don’t think I would put 100% of my money into TIPS though. That just seems too conservative to me. Once I have accumulated all the money I need then I might consider putting a large percentage of my investments in TIPS or some other form of guaranteed income but until then I will stay invested in stocks.

What do you think of Bodie’s advice?

The Infrared Heater Scam

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You can find out more about infrared heaters at Infrared Heater Scam.com

Now that it is getting colder the ads for the miracle heaters are coming out again.  They promise that their highly efficient heaters can save you 50-60% on your heating bills but do these wonders of Amish technology really work?

It is true that these heaters are highly efficient.  This is because all electrical heaters are approximately 100% efficient.  Any 1500 watt heater will produce roughly 5100 btus.  The ads are telling the truth here but they are being misleading.

Since electric heat is generally 3-5 times as expensive as other forms of heat it is unlikely they will save  you money on  your heating bill.  One possible way they could save you money is if you turned your furnace down and used a heater to keep the area you are in at a comfortable temperature.  I did this a couple years ago and it did save me some money.  I just used a $20 ceramic heater though.  There is no need to spend several hundred dollars on a heater to do this.  Again the ads are misleading.

Check out these Amazon affiliate links.  You can get a $20 heater
or a $400 heater.  They both put out the same amount of heat so which one would you get?

Simplest Way to Cut Heating Costs

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The simplest way to cut your heating costs is to not turn on your heat.   This article tells of a  no heat contest where people see how long they can go into the winter without turning on their heat.  The family that won last year made it to December 31.  They live in New Jersey so they must have been pretty cold.  I’m a tight-fisted miser and all for being frugal but I think that is a little too extreme.

That being said I haven’t turned on my heat in my apartment yet.  Since my apartment is on the the third floor it seems to be absorbing heat from other apartments in the building.  Even though the outside temperature has been in the 30s, I don’t think the temperature in my apartment has been below the 60s.  We do have several cold days forecast so I will probably have to turn on my heat sometime this week.  Saving a little money on my heating bill isn’t worth being uncomfortably cold.

Inertia

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In the absence of force, a body either is at rest or moves in a straight line with constant speed.  My body is at rest right now and there isn’t any force to get it moving.  I am having a hard time getting motivated to do anything right now either mentally or physically.   I know if I could just do enough to gain a little momentum I would be able to get more things done and feel better about myself.  I just can’t get started.

To me it is kind of like running.  I like running but I never want to go for a run.  If I do go for a run though once I am doing it I enjoy it and am glad I do it.  The next day though I still won’t want to go for a run.  This changes if I manage to go running often enough for it to become a habit.  Once it is a habit I look forward to running and no longer have to overcome my initial resistance.

I’m out of the habit of running right now.  I need to get back in that habit as well as develop a habit of working on my blog and other things.  Maybe this post will be enough of a spark to get me started.

Dollar Store Deals

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Due to my recent move I needed to acquire a few household items.  Being a Tight-Fisted Miser I didn’t want to pay any more than necessary for them.  Therefore I checked out the dollar store and was able to find a few things I needed there.

The best deal at the dollar store is probably the shower curtain.  It is $1 for the curtain and another $1 for the rings.   This would be about $10 at a big box store.  The quality probably isn’t as good but the shower curtain does its job and I haven’t had one fall apart on me yet.

Another good deal at the dollar store is kitchen items.  I bought a can opener for $1 and it works fine.  I also have a small frying pan that I bought at the dollar store several years ago that is still working fine.

Perhaps my best dollar store deal was a large laundry bag that I bought a couple years ago.  When I went hiking I used this to store my backpack when I checked it as baggage for my flight.  Many people buy large duffle bags to store their backpacks in which generally cost at least $20.  (If you don’t store your backpack in another bag the various straps and buckles on the pack often get caught on baggage handling equipment causing major damage to the pack.)  I figure the laundry bag saved me at least $19 and I still use it as a laundry bag as well.

Cleaning supplies and personal hygiene products can be good buys at the dollar store but I usually get these for free or almost free from playing the drugstore game.

I suppose some of the food might be a good deal but I just don’t trust food from the dollar store.

Do you get any good deals from the dollar store?  What products do you not recommend getting from the dollar store?