Category Archives: books

Lifetime Gym Membership: $10.99. Not being able to make excuses any more: Priceless.

you are your own gymAs much as I love running and cycling, I’ve never really been a gym kind of guy. It’s not just the crazy prices, but also simply getting to the gym, and the sweaty equipment, and the lukewarm showers, etc. I bought some dumbbells a few years ago to do arm workouts at home, but they mostly sit unused under the couch.

Recently, I heard about a workout program called You Are Your Own Gym, that uses “bodyweights” (pushups, situps, etc.) and common household objects to give you a workout. I checked out the book from the library and loved it so much, I bought the book!

Yes folks you read that right, I actually bought myself a book! I can’t remember the last time I did that. The way I see it, I spent $10.99 for a lifetime gym membership, since I don’t ever see myself needing to step foot in one again.

What I like about the exercise program is that it requires creativity. No chin-up bar? Use a door. Instead of dumbbells, bicep curls are done with a towel wrapped around your foot (pulling up, against the weight of your leg, provides the resistance).

And the part of this book that I LOVE has nothing to do with exercise at all. It’s about getting rid of your excuses. The author asks you to list all your excuses for not exercising, so you can see them for what they are. After doing that, I’m very motivated and have only missed a single session since I started. The same technique could be applied to breaking through the mental barriers preventing you from making any positive change in your life!

I’ve been doing it for about 2 months and the differences in my strength and physique are noticeable. Who wouldn’t like to be a little stronger and sexier? Check it out (literally, at the library) if you’re interested in starting a workout routine but you don’t like the gym.

The “Gone Fishin’ in the Foundry” Portfolio

[This is the final installment of a series on investing. Here was part one and here was part two.]

Instead of giving up on the Gone Fishin’ Portfolio when I found out that one of the recommended funds is closed, I decided to “leave the nest” of blindly following the advice in the book and put my newfound investment knowledge to the test. I made a few changes (let’s call them “improvements”) to the recommendations in the book.

Here’s my new portfolio. It’s essentially the same as the one in the book, but without the closed fund*, and it wraps multiple International investments into one International index fund (fewer funds to worry about means an even easier time investing, at the cost of a slightly less-customized portfolio).

Asset Type Vanguard Fund (Symbol) Percentage
US Large-Cap (i.e. big companies) 500 Index (VFINX) 15%
US Small-Cap (i.e. small companies) Tax-Managed Small-Cap (VTMSX) 15%
International Total International Stock Index (VGTSX) 30%
Investment-Grade (i.e. low-risk) Bonds Total Bond Market Index (VBMFX) 20%
TIPS (bonds indexed to inflation) Inflation-Protected Securities Fund (VIPSX) 10%
Real Estate REIT Index (VGSIX) 5%
Precious Metals Precious Metals and Mining Fund (VGPMX) 5%

What’s that last fund? It’s an investment in precious metals, like gold! But it mostly invests in the companies that extract the precious metals, which tend to follow the ups and downs of the metals themselves, but also produce profits which make them a higher-yield investment.** So we’re back where we started, with a small investment in gold. Katie was right after all!

After the one-time hassle of setting this up, all I need to do is a yearly “rebalance”. Each investment will rise or fall in value, which will make the percentages deviate from the targets above. I simply sell the ones that are too high, to buy more of the ones that are too low.*** It should take about 30 minutes a year! I can spend the rest of the time going fishin!

PS: If any of the above terms seems like mumbo-jumbo, PLEASE read the book before doing any investing. I’m no financial wiz, and I was able to grasp it. So you will too. Also, feel free to ask investing questions. Love answering them!

* Should VWEHX open back up, I’d allocate 10% to it, and drop the short-term bond allocation down to 10%.

** Go back and read the quote from investment guru Warren Buffett if you don’t understand why this is the case.

*** AKA “sell high, buy low”. Alternatively, I can save up cash over the year and add value to the underperforming funds until everything balances out. Still “buying low” but removing the potential tax implications of selling assets.

The Gone Fishin’ Portfolio

[This is part 2 of a series on investing. Here was part one.]

I read a number of books on money and investing, each presenting what the author believed to be the BEST way to invest your money. But none of them were able to back up their claims with as much research as The Gone Fishin’ Portfolio.

The author, Alexander Green, first walks readers though the basics of money, which should be review if you’ve been a Foundry reader for a while:

  • the magical compounding effects of saving a lot of money early on
  • why not to “outsmart” or “time” the market when investing
  • why to not trust your investments to a “professional.”

With that out of the way, he gets to the interesting stuff: an investment plan that is based off nobel-prize-winning research on the importance of asset allocation, keeping fees/taxes low, and staying the course (no matter what the latest “news” is from Wall Street).

The author even makes it dead-simple by giving you the actual Vanguard funds that represent each investment. So I went to shift my investments around in Vanguard to match the advice from the book. Uh oh! Since the book was written, one of the funds was closed to new investors. So there goes that portfolio.

In the next post, I’ll explain how I modified the advice in the book to get around this little roadblock, and to make the portfolio even easier to manage.

Frugal School: Junior Year

[Frugal School is my fun way of maintaining a book list. It has 12 books total, meant to be read one book per month. You can check out the introductory post about Frugal School, and see the entire syllabus.]

Junior Year – Getting Frugal

Welcome back to Frugal School. Hope you enjoyed your summer break. Did you get a job for the summer, or take it easy? Unfortunately, there’s no time for you to spend a year studying abroad in Frugal School! These Junior Year books consist of an overwhelming number of tips and tricks that will help many people make frugal choices. Do not read these without a solid foundation from completing the previous years.

tightwad Tightwad Gazette by Amy Dacyczyn
This book is the bible of frugal tips. Atheists can think of it as the yellow pages of frugal tips. Amy, the author, started a newsletter (via postal mail) in the 1990’s, filled with frugal tips from her family and other readers. Her family cut costs down so drastically that her and her husband were able to quit their jobs and live off the income from the newsletter. Just a few years later, they reached Financial Independence, and no longer even needed the income from the newsletter.
live cheap 365 Ways To Live Cheap by Trent Hamm
Trent is the writer of the very popular blog The Simple Dollar. His book contains a tip a day for transforming your lifestyle over the span of a year. Not only are the tips unique and helpful, but the tip-a-day format makes them easier to digest and implement. I think the title sells the book short, and it should really be called “365 Ways To Live Well” since many of his money-saving tips also promote wellbeing and happiness.
urban homestead Urban Homestead by Kelly Coyne and Erik Knutzen
What would a degree in Urban Frugalism be without a book on living self-sufficiently in the city? This book gives step-by-step directions for many of the things you’ll be doing in your own Foundry in the Forest: gardening, keeping chickens, canning/preserving foods, and (my favorite) bicycling.

Frugal School: Sophomore Year

[Frugal School is my fun way of maintaining a book list. It has 12 books total, meant to be read one book per month. You can check out the introductory post about Frugal School, and see the entire syllabus.]

Sophomore Year – Getting Started

Welcome back to Frugal School. Hope you enjoyed your Freshman year and didn’t get hazed too much. These Sophomore Year books form the foundation of understanding your relationship with money, perfect for getting started on your own frugal journey. This year only has 3 books because the first book takes some time to digest.

ymoyl Your Money or Your Life by Vicki Robin and Joe Dominguez
This book is the big one. Remember when you finally picked a major in college, and you took that intro class for the major and it totally opened your mind to a new way of thinking? That’s this book. I wrote a longer review of it that goes through each of the 9 Steps. You should read that post.
i will teach you I Will Teach You To Be Rich by Ramit Sethi
Ramit has a unique writing style that might turn off people older than 30. But once you get past that, his method for automating your finances can’t be beat. Learn step-by-step how to get your financial life in order, how to negotiate on the price of major purchases, and how to invest for retirement.
bank of dad The First National Bank of Dad by David Owen
This book isn’t just for dads and it isn’t even just for people with (or planning to have) kids. It’s a primer on the meaning and value of money, investing, and the stock market. If you don’t have kids you can skip the second half of the book, which details the author’s method of helping his children learn to invest without forcing any particular value system down their throats.

Once you’re through reading these books, you can continue on to Junior Year of Frugal School.

Your Money Or Your Life, Step 9: Managing Your Finances

[This is the 9th and final episode of a series on the book Your Money or Your Life. See my original post about the book.]

First off, sorry for the delay between Step 8 and this post. If you made it this far, you’re going to have money saved up. No doubt about it. I was already a saver before I read the book, but my savings rate has significantly improved since. And not by denying myself. I feel happier about my spending (and not spending) then I ever have before.

This chapter changed a lot between the first and second editions of the book. The first edition simply told you to put all your money in bonds. This is pretty bad advice no matter what the current bond interest rate is, since you shouldn’t have all your eggs in one basket. But these days, with record-low bond rates, investing 100% in bonds is awesomely stupid. Makes sense why they changed Step 9 so drastically.

The new Step 9 is vague about what you should do with your money. One thing hasn’t changed, which is the authors’ advice to be your own investment advisor. This is excellent advice. Nobody can beat the market, so you shouldn’t pay someone to throw random darts at a dart board.

So what should you do with your investment money? It’s going to depend on your risk-tolarance and how long you plan to save before dipping into your capital.

Instead of giving specific advice, the book recommends you do your own research so as to become knowledgeable about long-term, income-producing investments. For me, that means a balance of 60/40 stock indexes and bond indexes*. I use Vanguard because they have the lowest fees. In addition, they have a single fund you can invest in that will give you the 60/40 blend without the need to pick indexes individually, or rebalance when things go askew.

It’s called Moderate Growth (VSMGX), and I highly recommend the fund for any beginning investor who wants a hands-off, “set it and forget it” approach.

To diversify, I also have a small amount of money in safer investments (cash) and a smaller amount in riskier investments (peer-to-peer lending).

Here’s what my entire portfolio looks like:

Investment Percentage
Stocks 67%
Bonds 25%
Cash (emergency fund) 7%
Peer-to-peer lending 1%

Stocks end up more than 60% due to some individual stocks I still own from the days when I thought I could beat the market. Silly me.


So that’s the whole book! You can go back to my first post about it, and get an overview about the entire program. I highly recommend doing all 9 Steps, it has really changed my life for the better.

I’ll do more book reviews now that I’m done with this one. Though they won’t be as long as this one was!

Update: I did a series of follow-up posts on my current investment allocation, starting here. The above info is still great for getting started with investing.

* An index is a list of investments picked by some standard definition, simple enough that they can be bought and sold automatically by a computer program, which is what makes them low-fee investments. For instance, Dow Jones and S&P are the most well-known indexes.

Frugal School is in session

For a long time, I’ve wanted to add a book list to this blog, but they’re so boring. Like when your teacher would make you read books over the summer. So I decided to make it fun and scholastic by calling it Frugal School.

I’m happy to present the Freshman Year curriculum of Frugal School. I’ll roll out more “years” soon. There are 12 books in all, made to be read one book a month. Freshman Year has 4 books, and the other 8 will be revealed in subsequent posts.

Freshman Year – Prerequisite Reading

The books for this “year” aren’t even about money. They’re about laying the groundwork for making a lasting change in your life and I recommend them to anyone looking to make any form of self-improvement. Until you know how to make changes in your life, none of the books from the following “years” will be of any help.

mindset Mindset by Carol Dweck
I picked this book first because it’s going to flip a switch in your brain that says “I can make changes in my life.” The author calls it a “growth mindset,” but it’s really just the knowledge that no matter what hand we were dealt in life, we can improve attributes about ourselves by practice and mindfulness. She gives countless examples of athletes not born with any special gift, but who went on to dominate their sport due to determination and hard work. There are examples from almost every walk of life: sport, business, parenting, etc.
7 habits The 7 Habits of Highly Effective People by Stephen R. Covey
Yes, this book is over-recommended and the tone is often sanctimonious, but it’s popular for a reason. The 7 habits work, and they’re presented in a way that’s easy to digest and integrate into your life. My favorite habit is “Sharpen The Saw”, which just means always keep improving.
power of habit The Power of Habit by Charles Duhigg
Another habit book? You’re probably seeing the pattern. 7 Habits told you which habits to adopt, but this book goes deeper into the psychology behind how humans form (and break) habits. It gives specific tips to help you adopt new habits and make them stick. You could even read this one first.
choice theory Extra Credit: Choice Theory by William Glasser
Here’s some extra credit reading for you brown-nosers sitting in the front row. This book offers a different take on personal responsibility, though it’s similar to Mindset. The author believes that almost everything about one’s current mental state is due to choices they are currently making. Forget about what you’ve done in the past to get you were you are, and focus on improving the choices you are making now.

Hope you enjoy my school. You can always find a link to Frugal School at the top of every page.

Update: Continue on to Sophomore Year of Frugal School.

Your Money or Your Life, Step 7: Maximizing Income

[This is part 7 of a 9 part series on the book Your Money or Your Life. See my original post about the book.]

Maximizing Income is the flip side to the previous step, minimizing spending. The wonderful thing about maximizing income is that there’s a limit to how much you can save, but no limit to how much you can earn. This step isn’t only about your bottom line, it’s also about respecting yourself and your limited time on this earth. Ask yourself: Am I “making a living” or “making a dying?” What are your purposes for paid employment?

I’ll leave the details of making more money as an exercise for the reader. You’ll need to approach it differently depending on your life story, but here are some popular ways to make more money:

  • Ask for a raise
  • Change jobs or careers
  • Pick up a moonlighting gig
  • Earn money from a hobby or field of expertise
  • Sell stuff you don’t need
  • Make your money work for you – as capital, or by investing in yourself (e.g. continuing education)

Plenty 0f fast moneymaking schemes are out there, and unfortunately most of them are peddled by unsavory characters. One person whose advice I trust is Ramit Sethi of I Will Teach You To Be Rich. If you can get past his gen-x writing style, his blog and book have plenty of honest tips on earning some side income. Honestly, he devotes more of his time to getting his readers motivated than anything else. I took his advice and started moonlighting as a social media consultant. It didn’t really turn out to be something I wanted to devote serious time to, but it was rewarding to teach others and earn a little money on the side.

Sweet Rims

One day while I was driving through my ‘hood I saw a car with really sweet rims and I thought to myself: if the person driving that car needed to “tighten the belt” financially speaking, would he think to trade in the $10k rims for a more modest pair? That got me wondering, What are the “Sweet Rims” in my life? What are the objects, habits, lifestyles, etc., that I spend an inordinate amount of money on, but aren’t really an integral part of my happiness and values?

I’m convinced that almost everyone has Sweet Rims somewhere in their life. Some are easy to spot: the daily latte ($5 a day = a Sweet Rim worth of money each year) or pack of smokes, or the couple of drinks at a bar every night. Some are harder to spot.

For a time, my Sweet Rims was sporting goods, especially winter sports. But I realized that with the winter season only so long, it’s not even fun trying to keep up with snowboarding and skiing. So I ditched all the snowboard gear* and now I focus just on skiing (biathlon, really).

So what are your Sweet Rims? The default answer is “I don’t have any”…of course the person in that car wouldn’t think of his rims as something worth trading away in order to meet life’s goals.

I challenge you to think long and hard about this. It might be a few small things. If you really can’t think of anything, then I applaud your lifestyle and frugality, and aspire to be more like you!

* Carl Richards relates a similar story in his book The Behavior Gap, where he had so many pairs of skis he couldn’t decide which ones to use. It’s an awesome book which I highly recommend.

Photo from flickr user holeymoon

[This post was originally on my personal blog. I plan to copy a few other relevant posts over in the future]

Your Money or Your Life, Step 6: Minimizing Spending

[This is part 6 of a 9 part series on the book Your Money or Your Life. See my original post about the book.]

When it comes to how you spend your time and money, this step is about figuring out how much is “enough” for you. It can be illustrated by the following chart (taken from the book):

When “Your Money or Your Life” was written, the idea that this chart represents (“there’s an optimal level of consumption”) was pretty revolutionary. Since then, it’s become more mainstream: now we have the Voluntary Simplicity movement, and TV shows about people with small houses. The pendulum has swung away from “bigger is better” in the court of public opinion.

Summarizing this chapter is difficult, because you can’t just whip out a pen and paper and tabulate some charts about your money. There’s no formula or steps to follow, because “enough” is going to be different for each person.

To really live Step 6, the concept of “enough” is something that needs to permeate your entire existence. Knowing and respecting your personal level of “enough” goes way beyond spending, yet it frequently saves money in the end. Here are a few examples:

  • Driving the speed limit is fast enough. It’s safer, less stressful, and it saves on gas
  • Eating just enough food lets you split meals when you dine out, and never leaves you in a food coma
  • Cataloging everything I own (Step 1) made me realize the hidden burden of having more than enough material possessions
  • Living in a big enough house cuts down on living expenses, including hidden costs like heating
  • The cheap wine is good enough, so you can either cut down on your alcohol budget, or drink more of it! (This one might be the most controversial)

When you waste money by spending more after you’ve reached the peak of your fulfillment curve, you’re wasting your most precious commodity: your life energy (you have only a finite amount left). My friend Evan put it best, when talking about the time/money tradeoff:

It rarely seems worth it to spend another hour in a cubicle to have a more tender piece of meat for dinner.

Living a life of “enough” is what 90% of frugal blogs focus on: cutting back, doing without, “money-saving tips!” etc. It’s the stuff that practically writes itself because it’s so easy to look around your house and say “I wasted money (or time) on that.” But as we’ll see in the next chapter, there’s a flip-side to minimizing spending. Even better, it’s more enjoyable and potentially much more productive: maximizing income. Stay tuned!