Tim Ferriss Four-Hour Workweek Review

Some visitors have been looking for my review of "The 4 Hour Work Week" by Tim Ferriss. I decided not to do one.

For a review of this book I recommend:
Book Review: The 4-Hour Workweek

Prosper is My Gambling Account

I commented on a popular personal finance blog that my Prosper account is "like gambling." Let me clarify. I started on Prosper because someone I knew needed a small loan. I offered to help him write his request and fund a small percentage of it ( a few hundred bucks). I think that any loan to family or friends should probably be considered lost money. I hope they pay it back, but at the same time I wouldn't lend any money I couldn't live without.

So I invested a few hundred bucks I could live without. So far this person has made timely payments and I expect he will pay on time for 36 months. I then reinvest all proceeds into new loans. If all the loans default, I will not be that upset. If am skilled at picking good loans then I will be rewarded with a very small residual income stream. Either way, I will be fine.

I am not much of a gambler or a splurger. However, I certainly know people who have lost a couple hundred bucks at casinos or betting on the Superbowl. There are probably millions more who waste money ( on what I consider "stupid stuff") on an almost daily basis.

I highly doubt I will lose any money on Prosper. At worst I expect to break even. To me it's a fun and interesting use of time and relatively cheap. I probably will not be investing any more except the funds already in the account.

Tim Ferris Book- Four Hour Work Week

A lot of bloggers have been writing about and interviewing Tim Ferris about his new book " The Four Hour Week." Honestly, it sounded like a lot of hype to me, and the Amazon Reviews seemed a little "fishy." His PR firm probably hired some people to write perfect score reviews. This is common and is one of various methods ( including sending out mass cross-promotional emails offering incentives,etc) of "creating" an Amazon "Best-Seller." I suppose the hype machine works in the same way that Soundscan inflation ( and for singles, payola) works for music. Once something becomes a "hit" everyone takes notice. No one wants to be left out, and more people buy it.

Well, I decided to read the book. Someone else sent me a copy. How bad can a free book be? Actually, so far it seems pretty good. I am only about 1/4 of the way through, but a lot of the ideas are things I already think about or have been coming around to recently.

When I am done with this book, I hope to write a review. I am going to try to have it published on a more popular blog that I frequent.

Credit Cards: Universal Default and Rate-Jacking

I got a "change in terms" notice from one of my credit cards today. I am being Rate-Jacked! In other words, the card issuer is raising my interest rate ( APR) based on a periodic credit review. It must be based on something that happened BEFORE I ever got the card. I hit a rough patch in 2001, and my credit suffered. I got this card as a sort of "rebuilder" account in 2003. They pulled my credit then ( which showed all my current negatives and then some) and approved me. After 4 years of regular use and timely payments, this is how they reward me.

Unfortunately this is pretty common with credit cards. Most cardholder agreements have a provision for Universal Default. This means they will do periodic account reviews and change terms due to any activity they don't like. This includes activity on all your accounts with other issuers. If you are late or miss a payment on any account, you can expect your other cards to be "rate-jacked." Some cards will do this even if you never miss a payment or have any other negatives. Some issuers will get nervous if you make a large purchase or utilize a high percentage of your credit limits.

The good news is: Once you understand this concept you can utilize your accounts in a way that does not provoke negative action. For example, try not to max out any credit cards. Using less than 50% of your limits might be a good guideline. I don't think I need to mention the importance of paying all your bills on time.

I'm not too worried about my account. The negative action was based old defaults that I can't do anything about now. They will fall-off due to age soon. Actually, the increased rate will not cost me a penny. I just won't carry a balance on that card. It will be a monthly PIF ( Pay In Full- Use it and pay it of every month) card.

The Intersection of Frugal Living and Capitalism

I have been spending a lot of time reading Personal Finance blogs. So I decided to start my own. I consider myself a frugal capitalist. I believe in saving money, but you also have to Make Money!

I have also spent a lot of time answering questions from friends about general finance topics. For example I have helped with building credit, tax preparation, and internet marketing.

This blog will be a combination of general personal finance discussion and my own philosophical viewpoints on money and economics.