Well, I am certainly not the best one to look for info on this. In fact, I have sort of stop updating this blog due to my higher passion on photography. But for those looking for info, I will share what I can from my short experience here.

If you are blogger, don't worry too much about SEO. Just write great relevant post. Need proof? Well, one of my blog entries return as #1 in Google search depending on search criteria and some are rank relatively high, for a dormant blog. The example is here:

best 529 plans money magazine
How could this happen? My entry rank higher than article on Money Magazine?!?!

I can only thank some reader that actually come to my blog and read the article. I am also sorry if you are hoping that I can provide more info on this. I really love the topic of personal finance. However, I CRAZILY IN LOVE with photography. Along with that, I have full-time work, family and other things in my life, I just feel I couldn't do this. I don't want to put something mediocre out here. If I am going to maintain the blog, I want to make sure it is great info. Again, check out my previous post on some of the great personal finance writers.

I have been pretty much missing in action in term of my blog here.  Obviously for a reason.  The reason is related to the question on the title, "Do you follow your passion?"

That is the question that has been popping on my head lately. I started this blog just a few month back because I love the topic of personal finance. I am passionate about paving the way through secured retirement and whenever I can, I will try to talk my colleague at work to work on paving their way to financial freedom. I will talk to them about investments, ignoring all the buzz and noise and focus on their long term goal. Remind them to invest in index fund and balance it with bonds. Inform them about Roth IRA and its advantage compared to IRA for most of the people I know, but yet and them same time suggest them to read through it carefully since everyone has a different tax situation. I am suggest people with kids to look at 529 plans.

BUT, is my passion writing about personal finance topic? There are a lot of great personal finance blogger out there. Some of my favorites are J.D. Roth @ Get Rich Slowly, Free Money Finance, and Five Cent Nickel. For blog focus mainly on investment, I regularly follow Mike Piper @ Oblivious Investor. For Christian personal finance, I actually like Provident Planning, more than Christian PF. But that is simply because of one reason, which I may be bias about. It is regarding faith based investing. I agree more with Paul William @ Provident Planning, while Christian PF regularly featured Jay Peroni from Faith Based Investing, which believe in stock picking. However, beside that, both blogs are great. There are obviously other writers such as ManVsDebt and The Simple Dollar, however personally for me, the topics written by those writers gets boring to me since it is more resolved around how to live frugally and not as much about investing, the topic that I am more interested in. Again, that doesn't mean those blogs are not great, it is just my preference.

I start thinking about this question since I have another great passion of mine, photography. I realized that I can't focus on two side things, writing on personal finance and at the same time pursue my photography passion, along with my work and spending time with my beautiful wife and two young daughters.

What has push me lately to think more about this? I would contribute it to Zack Arias, an Atlanta based photographer. Earlier this year, I found out about his video, posted below.



As a photographer, it give me hope. Everyone starts as a beginner. And lately, Zack has been putting a Call to Action. It is to encourage people to go out there and serve people with cameras. I have been pushed. Zack's uses GOYA previous - Get Off Your Arse. It is one thing I want to pursue. I find a lot more excitement doing my photography and writing for my personal finance blog. So with this, I will bid adieu for this blog. It is better to stop right now while I don't have a lot of readers and this blog is still in infancy, rather than wait to realize this after I have reach certain level of readers on this blog.

Does it mean that I will never update this blog? I won't say never. If I find something great to write, I will. I know a lot of readers have stumbled to my blog while researching 529 plans. For that reasons, I will not close this blog too. However, I will put more focus on my photography, instead of my personal finance blog. I will also update my blogroll to include some blog that I think is great and more align with what I believe would help people more. If I don't add other blogs, it doesn't mean those blog are not great, but I put those that it my opinion would serve people better.

Since I have been focusing on my photography starting from two weeks ago, I have been doing several projects and have opportunity for other projects. So far, all of them has been a free project, not a money making project. But I love it. I find enjoyment out of it. I am learning more and continue to improve my skills.

Of course as a personal finance geek, please don't get yourself into financial trouble just to follow your passion. But make every effort to follow your passion and dream and yet and the same time, keep your finance in order. You may have to put your passion until you are more financial secure. I am in a more financially secure state, no debt, not even a mortgage since we paid off our mortgage.

Now the question is back to you. Do you follow your passion, even if it means that you will have to sacrifice something?

Darn, another personal finance blogger talking about living below your mean? Why? Can't PF blogger move beyond this topic? I don't think any personal finance blogger should ever stop reminding their reader to live below your mean. That is the main principal of building wealth. But I think each personal finance blogger has different suggestion on how to spend less that you make. As I mentioned in my about page, I have a single income family. We have two daughters, 2.5 years and 2.5 months old. I work for the government. Yet, we have been able to pay off our mortgage and has no debt. Obviously, the main reason we reach this point is not because we make a lot of money either through our salary. It is surely not because of our investments since started investing around in 2001 and the stock market hasn't really been that great over the past 8 to 10 years. The main reason is through our frugal living. Here are things that help us reach this point.

• First, I will admit we were both lucky to come out of college with no or minimal debt. We do not grow up in U.S. and we both came to U.S. for college. My parents paid for my undergraduate educations, including all living expenses. My wife parents paid for her undergraduate study and she worked her way through her master degree by being research assistant and frugal living. So, we started with a big advantage over a lot of people here.
• While we started dating in college and married at end of 2002.During that time, obviously we have our own spending and savings. We actually lived in separately cities coming out of college. When we got married and start living together, we know that there will be a point when we will have kids and the possibilities that my wife would stay at home. Thus we made decision early on that we will live with only one income. The other income will go fully for savings. Think about how much savings you could make with that! We have savings with only my income and in addition to full after tax money from my wife salary, we have tons of potential savings. Remember with investments is TIME IS YOUR FRIEND. Now we are both in our early thirty and we can use the power of compounding to the full extend.
• We did not buy more house that we need. We bought our house in early 2005, at the height of the housing market. Do we have any regret to buy during that time?  Well, to small extend, I would say may be.  The value of our house is probably at the same level now or even less than when we bought it. But we paid off our mortgages in 2007, thus we don't have to worry about it now. While we are looking at new house at a better school district (our school district is not good at all), we still have time as our first daughter will not start going to kindergarten for another three years. Even in the search for our new house, we are very careful not to be tempted by house that is more than what we need. We got listing from our realtor with houses that looks really nice and we really like, but we know we will not even consider looking at those houses because we don't want to purchase a house that more than what we need. Paul Williams from Provident Planning has an article on being content with your home. I think that is one key thing that we try to be: being content and grateful that we are bless with a home that we own.
• We own two cars. My car is 10 years old and my wife's car is 9 years old. Even with having two kids, we have not upgraded our compact cars. We know eventually we will need to upgrade our cars. One of the car will be an AWD car, but we will not buy more car that we need. We will make sure we buy cars with good gas mileage and reliability. Paul Williams @ Provident Planning also has another great article on being content with your car.

Those above are just some samples of things we do to live below our means.  In the future, I will put more examples of how we live below our means.

Other
The latest Carnival of Personal Finance hosted by Mary @ SimplyForties is up.  My post on the topic of trust is included.  Check it out here: SimplyForties: Carnival of Personal Finance: Live From Monticello!

Do you check how your investments performance and compared it to the market? How about comparing it to your peers? Do you take solace when your investments losses is less than what S&P 500 losses last year?

I know personally I compare my investments against how S&P 500 does. But when I sit down to think about it, it really DOES NOT matter what our investments relative performance is.

The goal of investing should not to beat the market. We invest to reach a certain goal, such as for retirement, college educations, etc. If doesn't matter whether we trail the market or beat the market, as long as the investments bring you closer to reaching your goal, that is what matters. If your investment beat the market last year, but overall portfolio values is still down, it is only a small consolation the fact that your losses was less than S&P 500. The fact would still be that you are further away from your goal.

In fact, there are potential perils in comparing your performance against the market.

• Temptation to tinker with your investments.  If your investments trail the market performance, you may be tempted to start making changes to your investments. You may start questioning whether you need to take more risks and may be taking additional risks.  You may start questioning your ability and stop trusting yourself.
• Unrealistic optimism and overconfident about your abilities. Being confident is fine, but being overconfident could lead you to underestimate the risks involved with investing. You may start putting extra money to your best performing funds or stocks.
• Focus on short term performance and let your investment strategy effected by your emotion due to current environment. Whether you are ahead or trail the market, you may start looking short term and forget about that the goal for investment should be long term.  If you are ahead of the market, you may start to think the conditions will continue for foreseeable future.  This may lead to the first peril I mentioned above, the temptation to start making unnecessary changes to your strategy.

How often do you compare your performance against the market?  Do you see any other potential dangers of relative performance?

* Photo by Mike Johnson - TheBusyBrain.com

Investopedia definition for Target-Date Fund:

A mutual fund in the hybrid category that automatically resets the asset mix (stocks, bonds, cash equivalents) in its portfolio according to a selected time frame that is appropriate for a particular investor. A target-date fund is similar to a life-cycle fund except that a target-date fund is structured to address some date in the future, such as retirement.

Target Date Funds have come under fire recently, such as mentioned on here.  I personally think it is unfair.  I think the problem lies with investors not doing their homework.  One of the most common mistakes by funds investors is not reading the funds prospectus.  By the name, most people think they will not understand the information provided in the prospectus, while in fact, prospectus is written mostly in plain English.  By not reading the prospectus, many investors do not understand the risks and expectations involved in investing on target date funds and the fact that target date funds DO NOT guaranteed positive returns. I think overall, Target Date Fund is a good choice for people that have no clue about investing.  However, those people needs to realize the risks involve with Target Date Fund.

Having sort of trying to defend the target date funds, I don't necessary it is the best options for everyone or even for most people.  As I mentioned earlier, a lot of investors are confused by the name and think that they will have enough money during that target date.  They think it is guaranteed.  But again, those are minor.  Another con is that target date funds assumed that everyone with the same target retirement date has the same risks profile.  That is far for reality.  Your risks tolerance may be different than others risk tolerance funds that have the same target retirement date.  And another negative in my mind, the reason that I moved away from Vanguard Target Retirement 2045, is that I don't think most target date funds offer enough diversification.  For example, Vanguard Target Retirement 2045 asset allocation is about

• 72% - Vanguard Total Stock Market Index Fund,
• 9.2% - Vanguard European
• 4.9% - Vanguard Pacific
• 4.1% - Vanguard Emerging Market 
• 10% - Vanguard Total Bond

I don't mind the 10% in bonds, since I think everyone should have some amount in bonds.  But on the equity side, about 80% of it is in domestic stock and only 20% in international stock.  I personally think the allocation in international stocks should be higher.  And I would also prefer more small cap and value in the domestic stock than what Vanguard Total Stock Market Index offers.

Remember, a lot of this is very personal and will be different for everyone.  But I think all you need is a little bit of homework and you can come up with better asset allocation option than what target date funds offers.  However, if you don't want to do your homework and at the same time doesn't want to pay for professional advices, then instead of simply leaving your money on savings account, then I would consider looking at Target Date Funds.  If you simply want several model portfolios, I would suggest looking at Paul Farrell's Lazy Portfolios.  However, do not simply copy one of these portfolios simply because of its past performance without understanding its goal, objective and your own risk profile.  This should be used as guidelines only.

* Photo by leeroy09481

I found this new article on CNN Money - Obama to workers: We'll help you save - interesting. Overall I think it is a good initiative. Let's take a look at the three main ideas from the initiative:

Auto enrollment in retirement plan. While this is not new, the initiative is to reduce the amount of paper work hurdle. The goal is to have more small and medium sized employers to do this. I think this is great. A lot of time, people are just too lazy to find out more about the retirement savings plan. My only reservation is where is the money is going to be put to. Is it going to money market funds? Or is it going to target retirement funds? While I think Target Date Funds would be good for the automatic enrollment, my concern is not every Target Date Funds are created equal. Some are too aggressive and too expensive (high expense ratios). Having said that, I still think it is a good idea.

Getting tax refunds in U.S. savings bonds. I personally don't like this idea. I think most people will be better served by taking the money and invest it properly. Better yet, I think it would be better if you don't get refund at all because you are essential loaning money to the IRS without any interest. But I know a lot of people like to get money back. However, if you know that you will get money back and you know that if you get it back you will spend it right away, then putting it U.S. savings bonds may be a good idea for you.

Converting unused vacation times and sick days to 401k money. The best idea out of the three. I really like it. I still think for most people, they should use their vacation times, unless if you are allowed to roll it over. We need to balance work and life. However, for some people that are entitled to many vacation times due to the amount of years at the organization, to be able to convert this to 401k vacation money is good. I personally would like this to be capped to at most 50% of total vacation times entitled to the worker each year.
Update: One thing I forgot to note is that this is not mandated, but encouraged. And apparently, this is not a new rule either, but rather an emphasis of existing rule. Check out this article from Marketwatch.



* Photo by alancleaver_2000

I am currently reading Straight Talk on Investing: What You Need to Know, written by Jack Brennan, Chairman of The Vanguard Group and previously the CEO and Chairman of The Vanguard Group. So far, I really like this book. In one of the early chapters, Jack Brennan discuss about whom to trust in the act of investing. He listed four things:

Trust Yourself

A lot of people has problem trusting their own judgement about investing. That is why I think a lot of people follow the like of Jim Cramer and follow his stocks recommendation. When they hear someone, such as their friends, make a killing on an investment, they envy it. I was in this situation before I learn the hard way that trading is not investing. When my colleague used to tell me that the stock he is investing right now is doing well, I have a tendency to put my money in the same stock. But it was too late then. And when my other co-worker got into option trading and making profits, I tried it too. Again, I lost money "investing". The problem was that I didn't trust myself. I didn't think that I could make sound investment decisions.

Now I am a lot more confidence on my investment strategy.  I invest in passively managed index funds.  I have set up an asset allocation that I can be comfortable in.  During this recent downturn, I continue to believe in my strategy and has continued to contribute more money in my investments, both in my tax deferred accounts and my taxable accounts.  I no longer pay attention to hot tips or try to follow the trend.  I actually view the current market as buying opportunity. I don't spend a lot of time doing research on each of my individual investments.  If I heard someone makes a lot of money on certain stock, I don't envy them because I have my own investments goals and objectives.  And I know it will be hard for that person to keep the performance and continue to beat the market in the long run.

Trust the Financial Market

If you don't think the growth will occur in financial markets over time, then you shouldn't even have money in the market.  You should stay with those safe options, such as money in savings or certificate of deposits or may be U.S. Treasury bills.

I believe U.S. economy will continue to grow.  And I believe international economy will continue to grow too, especially the emerging market.  However, there is risks in investing in stocks.  And there will be up and down in the economy, but over the long period of time, the world economy will have an upward trend.

Trust in Time

Time and the power of compounding are investment best friend.  Albert Einstein said:

“The most powerful force in the universe is compound interest”

It is best to start early to reap the most benefits of the power of compounding.  Jack Brennan emphasizes that you must reinvest all the income and dividends, instead of taking them in cash (which is one reason why I prefer mutual funds instead of ETF since it is much easier to reinvest all the income and dividend with mutual funds. I will try to do a comparison of Mutual Funds vs ETF in the future).

Find a Financial Provider You Can Trust

If you don't know about the financial provider and can't trust them, why put the money with them.  If you are going to have a financial provider to handle your investment, you may want to understand how your money is managed.  Don't be a victim, such as those that invested with Bernie Madoff.  Jack Brennan listed four information that a trustworthy provider of financial services should be able to provide upon request:

• A clear and complete explanation of the fees you'll be charged.
• A record of the company's past investment performance.
• An explanation of how the performance of your own investments will be reported to you.
• A clear understanding of how the company will respond to any questions you have.

It is amazing how the things listed above would have helped most people avoid Bernie Madoff or other investment fraud.

Finally...

How about you? Do you trust in yourself, in the markets, in time and in your financial provider? If not, then do some homework then get yourself to the proper investment strategy. And there right moment to start investing is always now.

* Photo by Joe Nangle