TGIF and Happy Super Bowl weekend for those of you who watch the game!

I am going to jump right into the questions as there are a lot this week! Also, I have not forgotten about Wall Street Survivor — I will set that up for us next week.

A huge thank you, too, to all of you who have been commenting on the blog and sharing your tips! It is so fun for me to see a comment and think, “oh, I’d better answer that!” and then see another comment right below it from a helpful reader who has already answered it for me, and answered it well! You each have fantastic tips and advice, and I really appreciate you taking the time to share what works for you with the rest of us. Thank you!

Also, a huge congratulations to the following grasshoppers who have earned their white belts!

  • Kristan
  • Danelle Sue
  • Gary
  • Brock
  • Linda
  • Honolulu Aunty
  • W
  • Daniel
  • Tom
  • Jodie
  • Bob
  • Tendayi
  • George
  • Alberto
  • Gilbert
  • Steveo
  • Jessie
  • Bill
  • Tim

Now, onto some questions…

First, Thalie asks,
I just found this blog – this will be really helpful to me! As one of my goals for this year, I am aiming to do what you have done! Would you recommend real estate investments? And what about purchasing precious metals now? any recommendations? I look forward to hearing from you! Thank you!

Hi Thalie! Welcome to Kung Fu Finance! Congratulations on your goal of taking control of your finances and achieving financial independence! That is a great goal.

Regarding my opinion on specific assets, here you go… I don’t know where you live so it’s a little hard for me to comment on real estate, as real estate is very, very local. For example, I live in Palo Alto in the US, and real estate here is booming.

Facebook just filed for IPO, and there are many other well-funded start-ups here that really drive up the prices of local real estate — we have all of the ingredients for high-priced housing: jobs, schools, families and young professionals, access to continuing education (Stanford, UC Santa Clara, San Jose State, etc.). All of these (in addition to a lot of people who have a lot of money) really combine to drive up prices here. A “starter” home in Palo Alto is more than $1M USD.

But across the freeway, less than a mile away, sits the town of East Palo Alto, where it’s a completely different story. There, home prices are 1/3 or less than prices here in Palo Alto, but the schools are not nearly as good and they have a very high crime rate (although proximity to all of the other features, universities, etc. is the same). So it’s very, very local!

That is just “house prices” though…in general when I think of real estate as an investment I think of buy-and-hold rental real estate. That could be a pretty good investment right now, and one I am looking into myself (although not here in Palo Alto — the numbers just don’t work).

But in other areas of the US where they have growing jobs, people moving into the area (versus away), a diverse employment base (not dependent on just one industry/sector), access to higher education/etc., you can find some wonderful deals. And many, many more people are renting now, and probably will be in the future, because it is very hard to buy.

In fact, that might be the biggest drawback — it is difficult to find financing now (unless you can prove you don’t need it). But don’t let “difficult” stop you! Everything worthwhile is “difficult”.

If you’re interested in this and have the business/management background to really run a good rental property (or can hire a good property manager) then this could be a wonderful asset for you. Just make sure that whatever you buy you can rent, because it is all about cash flow (you don’t want your new property sitting vacant for months!).

This is such a big topic in and of itself (there are entire websites devoted to real estate investing) that I will stop here for now, but in general, yes, I like buy and hold rental real estate. I would not try to “fix and flip” a house right now (at least not here — again I have no idea where you live so maybe in your area/country things are different?)….good luck!

Regarding precious metals, I’m a big advocate for owning some physical gold and silver. It was a “better” time to buy them when I wrote my “Why I’m Still a Gold Bull” article (saying I was happy for the correction because now some of my family and friends could “get in”) and my special report, because in the past 30 days gold is up more than 10%:

Kitco 30 day gold

Gold up more than 10% in past 30 days

But I’m still a gold “bull”… if you don’t have any I would look for corrections (because they still could occur — the situation in Europe is far from resolved and that could send everything cratering!) and add some to your portfolio. But this is where I have to jump back into my “I am not a licensed investment advisor” and “I cannot give personal advice” spiel because I don’t know you and your personal situation. But, in general, yes, I think it’s important for everyone to own some physical gold (and silver, based on your risk tolerance — it’s much more volatile than gold and has some industrial metal properties) and also to own enough cash to weather and take advantage of any storms (in your life or in the markets!).

Next, from Steve:

I got organized 4 years ago, using Dave Ramsey, and I am now debt free, It is amazing how much easier when the first of the month comes around, after the 1st day the majority of the monthly recurring expenses are paid. I then keep running through my mind, who do I need to pay, what have I forgotten, I look for things to pay, being debt free was enormous in freeing up my cash flow. No more confusion, just moving forward.

I am considering quicken, but am still undecided as to if it is worth the cost, and would really return its value.

Hi Steve!

CONGRATULATIONS on being debt-free! That is awesome — good for you!

Regarding Quicken, I actually really like it (well, I guess “it’s the lesser of all of the evils” might be more appropriate).

In fact, when I went from having a PC to a Mac, I *really* missed “real” Quicken (there is a “lite” version for Mac users, but it has nowhere near the functionality of the PC-based Quicken). I also tried Mint.com, iBank, and a few others, but they all fell short of Quicken (at least to my needs).

It’s funny, I hate to plug Quicken as there is a lot that I don’t like about it, but as far as automation / monthly tracking / reporting of your finances goes, it’s the best I have found (if anyone else has a better solution please share it with us!).

Now that Intuit (maker of Quicken) also owns Mint.com, you could start with Mint.com, which is free, and see what you think. Mint is great for people just starting out who don’t have complicated investments (and to be fair, I haven’t looked at it in more than a year so it may have some new features now). I am an extremely visual person and like to “see a picture” of my finances rather than just lines and lines of numbers on a spreadsheet, and Mint.com has some great free charts/graphs (at least they used to — I should really check it out again!).

It comes down to “data in = data out”…if you take the time to properly categorize your transactions, whether in Quicken or in Mint or whatever software you use, then you will really benefit from the reports (and I will walk you through how I create my own personal financial statements in the next few weeks, based on those canned reports from the software).

So, basically I would recommend Quicken (but only because I have not found anything better yet), but if you’re wondering about the cost/benefit, start with Mint.com (it’s free!).

Good luck, and SUPER-CONGRATULATIONS on being debt-free!

Next, Michael asks:

Hi Susan, Came across your blog after your post in ETR a while back. I appreciate the little glimpses into how real you are and I and others would enjoy the benefit of seeing more how you and your family went on this journey to live the life you live now.

A while back in ETR Craig shared his schedule that has helped him to be productive and get things done. It did give me a good idea and a start, but often it seems I just don’t have enough time for what it takes to be financially successful plus meet other demands.

As a mother and wife what is your schedule typically like and where do you find time both now, and in the past to do the things that need to happen in working towards financial independence without neglecting your other duties? I know it’s mundane, and that there’s no typical day or week in anyone’s life, but it would be nice to see how you and your husband laid out things that you had time to grow, do the necessities, and stay connected as a family.

Thanks from a new husband who wants something better without my wife feeling like I’m stealing what little free time we have from her.

Hi Michael! Thank you for your very nice comments and question! I have to laugh because you sound exactly like my husband and I about 10 years ago (and if you ask him I’m sure he’ll say, “What do you mean 10 years ago? That was last week!” 🙂 LOL.) In fact, I should really have him do a guest post on this, because I guarantee you he would completely empathize and relate. (And I do, too!)

I read Craig’s 12 rules for his life last year and I’m very impressed—he’s an amazing guy (and now that I know him personally a little, I can vouch for him being not only amazing, but also a super-nice and genuine guy, too). He really does live by those rules, and he is extremely successful because of it! So I would definitely follow his suggestions to the extent that you can work them into your life (I definitely do!). I agree with him, too, that writing down your rules to live by is very helpful and important.

I started to tackle my own rules in this QnA but it is way too long—2500 words so I will spare you and write a full post on this next week — thank you for the great reminder!

But in the meantime, here are two things that I have found that helped my husband and I get better at working together to achieve our goals:

1. If you haven’t already, create joint financial dreams and goals so that you feel like you are working toward them together.

My husband and I were miserable until we did this (well, “miserable” is a little strong, LOL, but I remember the days when I thought that he “worked all the time” and I didn’t understand or see the point as to why, because we had never talked about it).

“To make a lot of money” and “To have a ‘better’ life” didn’t cut it for me…they were too vague and I would say, “Well nothing is worth having to live like this now!”. But, once we sat down together and created our joint vision and specific goals for the future, it was much better! Suddenly I could get behind “saving enough money <insert specific dollar amount here> to start our own business in the next two years” (one of our goals 10 years ago, and we did!).

That way you have a timeframe for when the current “pain” can end (if you’re experiencing any—”pain” is probably the wrong word but hopefully you know what I mean!), and something to work toward together that you are both excited about.

This should also involve a conversation about what you both are willing to sacrifice (and what you are not) to achieve them, and how you want to go about it.

I really can’t stress this highly enough—you can have the exact same schedule and “life” as before this conversation and vision/goal setting session, but the minute you both understand why you each are doing what you are doing, you will feel miraculously better about it!

2. If you can, read a personal finance book/investing book once per day, even if only for 15 minutes.

I used to read every night before bed (now I write), and it’s something you and your wife can do “together” and yet “separately” at the same time (e.g. you can snuggle on the couch together and she can read something that interests her while you read what interests you). If you can, have her read the books you read, at least the “fun” ones (Benjamin Graham is not for everyone but she might like Rich Dad, Poor Dad…it’s written as a story and is fun to read).

I hope this helps (it is so hard for me to know the level of detail to provide or where you are at currently…maybe you already are a voracious reader and a day-trader and want to know how to find more time to practice advanced options strategies…?). I will write a full-length post on this next week with my own rules and “typical” schedule (although you have to promise not to laugh!). 🙂

Next, from Bill:

KFG, 
I also am a Louis James fan and a IS subscriber. I have owned Casey stocks for sometime and need to get over the hump and grow from here. Keep kicking me, I am working on my goals today.
 A good short-term motivator is to write down your six most important things each night and number them by importance. In the morning start on number one and only number one. If you get sidetracked get back to one. After all you did decide that it was most important. Work your way down the list concentrating on each one separately.

Hi Bill, that is a great tip; thanks and welcome to Kung Fu Finance!

Yes, I think Louis James is incredibly smart, and I’ve been a happy IS subscriber too for many years. Good for you for taking the next steps and getting motivated to really kick some butt on your finances this year!

That’s a great idea to write down your 6 most important things each night so I want to share it with everyone (sometimes people don’t go back and read the comments on articles or email they’ve already read). That is a very smart idea and puts your brain into “solving” mode when you sleep. (And I do that, too, each night, although it’s not always 6, but I write down what I want/need to do the next day, and it’s amazing how many days I wake up with ideas and solutions because I’ve fallen asleep thinking about those problems/issues.)

The subconscious can be a wonderful thing (especially if you can guide it toward the forces of good!).

Next, Ron from New Zealand says:

Hi Kung Fu Girl, I just wanted to let others know that the book “Creatures from Jekyll Island” is available directly from Edward Griffins website at http://www.realityzone.com. What an excellent book it is too; learn about the Feds fraudulent behaviours – one of the greatest con jobs of all time. Even though I live in New Zealand their actions impact the whole world. Thank you for your intelligent and timely financial information – I really enjoy your newsletters. Many thanks, Ron

Thank you Ron, I’ll let everyone know about the link!

I have many more questions but will either write full-length posts on them next week (and I still owe you all one about my investment/trading strategy) or will answer them in next week’s QnA as this is 2500+ words and you all want to get on with your WEEKEND I’m sure!

Happy Super Bowl for those of you who watch….

To your financial success,

— Kung Fu Girl