Wednesday, August 10, 2011

Amadeus and Economics - Are You Salieri or Mozart?

Last week, I had the opportunity to go see the play Amadeus at the Old Globe Theatre here in San Diego. Many of you are undoubtedly more familiar with the movie version from 1984 which starred F. Murray Abraham as composer Antonio Salieri and Tom Hulce as Wolfgang Amadeus Mozart. Nevertheless, it was originally a play, and its original Broadway cast featured Ian Mckellen (Gandalf!) as Salieri and Tim Curry as Mozart.*

For those of you who may be unfamiliar with the work, Amadeus (fictionally) dramatizes the relationship that composers Salieri and Mozart had. The work dwells quite a bit on Salieri’s jealousy towards Mozart, so much so that Salieri starts out the play by suggesting that he had a hand in the untimely death of Mozart. Much of the dramatic tension focuses on Salieri’s systematic dismantling of Mozart’s opportunities towards composing work and Mozart’s subsequent inability to take care of himself or his family. At the end of the play, Salieri, in comparing his own middling music with Mozart's genius, declares himself the “patron saint of mediocrity,” and this pronouncement seems to play out in the real world as Salieri is largely forgotten while Mozart is certainly within the first few classical composers nearly any person can name.

This leads me to my personal finance point. Salieri is shown in the play spending much time coming up with ways to destroy Mozart, but he is never shown composing music. Contrariwise, Mozart is frequently shown scribbling away in efforts to write his next piece of music which he hopes will provide him with economic stability.

My point is that every dollar that you or I spend is a dollar that cannot be spent somewhere else. This is the basis of much financial writing, such as the Latte Factor (if I buy a coffee drink every day, that’s three bucks that I can’t save for retirement or other life goals).

Similarly, each hour we receive on earth is a gift, and each hour we spend on one task is an hour that we cannot spend on something else. For example, I have stated that one of my goals is to write and submit a play to a playwrighting contest by the end of the year. However, if I spend my hours away from work watching television and not doing any writing, then I’m not achieving my goal because I am choosing to spend my time in a way other than one that is personally fulfilling.

Had Salieri spent more time writing music, and less time hating on poor old Mozart, perhaps he could have been better remembered by posterity.** Instead, if Salieri is remembered at all, it is generally as a fictionalized character in a play.

Each and every hour of our lives is precious, and once these hours are spent, they are gone forever. One key difference between the economics of time and money is that while money can be saved, hours cannot be.

So, how are you spending your time? Are you a Salieri who complains while others forge pathways to their dreams? Or are you a Mozart, who takes what you’ve been given, and uses it in a mighty way?

*What a cast! What a production it must have been! I wish I could have seen it.
**While one might argue that propensity towards a skill is more important than just spending a lot of time on that skill, I’d argue that even all the propensity in the world won’t pay off without putting a butt in a chair and starting to work.

Tuesday, August 9, 2011

Guest Post: Know the Habits of Frugal People and Incorporate Them

We are excited to have a guest poster today at Pinch that Penny! More information about the author is at the bottom of the post. I think some of the points are arguable, and I'd be interested in any feedback. In the meantime, enjoy!


Being frugal is about controlling your pennies so that you can allow yourself to splurge in the future. If you don’t exercise control over money, soon money will start controlling you. This may sound easy for you, but leading a frugal life is not as easy as you may think it to be. If you avoid frugality, you are sure to land in high interest debt for which you may have to run to the various debt plans that can assist you in getting out of debt. Different debt relief options have different impact on your credit score and therefore it is much better to embrace the frugal life rather than run to professional debt help companies. Have a look at some habits of the most frugal people.


1) Be proactive while controlling your finances: The first habit of all the frugal people is to take responsibility of their own finances so that no one blames them for the financial mistakes that they might make. Make your own financial decisions without taking the opinion of too many people around you. The more you ask people, the more you’ll be confused about the right steps that you must take to bring your personal finances in track.


2) Start off with the end in mind: The people who are successful in achieving their goals will always be able to envisage the end despite the various obstacles that they come across. If you don’t visualize what you want out of something in life, you can never see yourself as a financially fit person in the long run. If you create a budget today, make sure you clearly visualize what you want to achieve through it and the exact amount that you plan to save through that budget.


3) Set your priorities: Frugal people set their priorities and are always sure about the things that they need in a particular month. They can distinguish between their wants and needs and thereby control the decision of spending their bucks on the things that they need rather than on what they want. Ask yourself about the things that are most worthy to you before you take the decision of whipping your plastics for getting them.


4) Synergize and form a team: To synergize is to creatively cooperate with a team so that you can learn more skills on frugality from others. You may work in a team with your friends, family members and exchange the ideas that you’re adopting to lead a frugal life. Surround yourself with frugal people so that you can mutually benefit from each other.


Saving money, following a budget, eating less out, carrying cash instead of credit cards are some other habits that most frugal people follow to stay on the right financial track. You too can follow if you want to lead a debt free life where you don’t require running to professional debt plans for getting financial help.


Author’s Bio: EHM is a regular writer for various finance related Communities including Debt Consolidation Care. She is a PG degree holder in Marketing and Finance and right now working in a reputed bank as a relationship manager.

Monday, August 8, 2011

July 2011 Retirement Status

Well, it's a few days late, but here are my latest retirement figures.*

Overall, I'm not very pleased, and I am fairly confident that nearly anybody is probably not pleased with how their accounts have gone in the last month. I haven't added to either my old 401k or my Roth IRA, and they both have made precipitous drops in the last month (I lost about $2800 in my old 401k, and you know what? It didn't even call me in the morning).

Still, I am happy and blessed to be this far along towards retirement, but I guess one never really loves to get taken along on the whims of the market (at least not when it goes down).

My plan for August is to get another three to four hundred smackers in my Roth while the market is down. I am fairly confident in the mutual funds that I've chosen, so (allegedly) it's just a matter of waiting this dark period out. We'll see if I'm doing any better come next month.

*I thought I'd wait for S&P to downgrade the U.S.'s debt before I posted. It seemed the most equitable.

Friday, August 5, 2011

Linkfest oh-Eleven

Here are a couple of posts that I have enjoyed over the last week.

Flexo writes that Ignoring Bills Won't Make Them Disappear.

Couple Money has an article about inexpensive date ideas.

Budgets Are Sexy had a great article on working as a tutor.

Punch Debt in the Face writes about ways to lose weight cheaply.

Over at The Year of Shopping Detox, there's a post advocating the barter system.

Thursday, August 4, 2011

Bad News Bear Market

Nice title, Bryan. Thanks, Bryan.

Anyways, if you have glanced at a television today, you've probably noticed that the Dow is down better than 2 percent today alone.* In fact, over the last week, the stock market has kind of gone into the crapper (I don't want to point any fingers *coughcoughcongress*, but it sure seems like the financial markets aren't happy about the U.S. being on the brink of default earlier this week).

Now, as someone who has just recently started to invest in the Roth IRA, this is vexing news. In fact, that aspect of my retirement portfolio has dropped about 7% in the last week alone (it has dropped a little more for my stocks, and a little less for my mutual funds [God bless 'em!]).

As a note to any politicians who might be reading this site, are you aware of the most important factor in one's reelection? In the immortal words of Bush I, "It's the economy, stupid." Republican or democrat, if the economy's tanking, so also will your reelection bids. While I am jaded enough to question the value of just one vote, I am just unjaded enough to take my irritation with the markets out at the polls.

I'm just saying, maybe it's something to think about before the next time the debt ceiling gets close to the limit.

*Update: as of market close, the Dow was down 4.31%. Awesome.

Tuesday, August 2, 2011

Does Your Credit Card Make It Difficult?

I am happy to report that for the last several months, I have been paying my credit card off in full every month. However, and maybe I'm a weirdo, but I have a hard time paying a big lump sum of money all at once. For example, if I owe $500, it's easier for me psychologically to make two $200 payments and one $100 payment than it is to make one large payment of $500.

It's unreasonable, I know, particularly when I also know that I have been able to budget for the whole amount due. What can I say? At least I'm paying it all off.

Normally, my smaller payments work swimmingly. I make my smaller payments, my card's balance shrinks, and I finish the balance due off by the end of the month. However, a few minutes ago, I ran into a small snag.

My primary credit card is the Chase Freedom card because I like cash-back rewards combined with no annual fees. I made a small payment on 7/31, and I tried to make a small payment again today, but I received an error message that stated that I was unable to make my payment due to the fact that I had submitted another payment within the last three days.

I can't think of a good reason why Chase would implement this policy, other than they are trying to "catch" people, like me, who make smaller payments. While it's not a big deal for me not to be able to pay today (my billing period end date is 8/26), if I were facing this situation on the last day that payments were due (and thus, facing the prospect of getting charged interest on the balance carried), I'd be pretty upset.

The only logical reason I could give for Chase to implement this policy is that it must cost the banks something to send money to one another. However, Chase is my primary bank, so Chase is denying me the ability to move cash money from one Chase account to another Chase account! It's ridiculous!

Have you ever hit up against credit cards making it difficult to make payments, or otherwise hassling you in an (apparent) attempt to collect fees from you? How did you work it out?

Monday, August 1, 2011

I'm a Day Late and a Dollar Short with Borders

A few months ago, hearing about Borders' slow downfall, I opted to buy into their Borders Rewards program. I figured if I spent a little extra money, maybe that would help the company from shutting down.

We all know how well that worked out.

However, the perks of my paid membership were that I received a certain percentage off of whatever I bought, and I got a coupon book. Probably the best coupon was for a free book (up to a $30 value). Since I only paid $25 for the membership, I thought for sure I would end up slightly ahead in the deal (arguments about the "worth" of books aside).

Flash forward to a few weeks ago when Borders announced it was going bankrupt. Not wanting to lose out on the "perks" that had been granted to me, I rushed to the store for my free book, only to find a sign that read:

"No coupons will be accepted at this time. No exceptions."

Well jab me in the eye with a tuna fish can and call me Susan.* That blows!

In general, though I buy a fair amount of books, I shy away from the membership programs that bookstores like Barnes and Noble and Borders have offered because I don't want to be out the extra $25 right away. Also, and I suppose this is the point, I feel obligated to purchase from that store after I sign up for the membership.

While I couldn't have, at the time, known that Borders would go bankrupt, my buying the membership program with Borders sure ended up like accidentally dropping a piece of toast butter-side down.

Have you ever signed up for some similar program, only to face it being a super-awful idea due to actions outside of your control a little later?

*What?