Quote of the Day

A talk I just heard repeated this quote from J. Reuben Clark:

Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation. ... Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.

Gambling: A Day At The Races

Back when I was a kid, my brothers and I would watch the Santa Anita races on channel 56. Before the race started, they'd pan down a list of the horses on the racing form, and we'd each pick one, usually based on a cool name like "Unrequited Love" or "Mugging Grandma."

But pretty soon, I started to figure something out. Instead of picking a horse based on a name, I started picking the horses based on a number. Not the number they wore on their side, but another number. It was usually the last thing on the chart, and for some reason, they'd usually subtract one from it. I didn't know why.

10-1. 4-1.

Why didn't they just write 9, or 3?

I didn't know. But I did start to figure out a good way to pick winners. Pick ones that had a really low number right there. I didn't win all the time, but I was winning way more often than my brothers.

I'd learned the sad truth of horse racing. If you want to win, you have to bet on favorites. And if you bet on favorites, the odds are so low that you barely get back what you paid, and even a few losses can tip you negative pretty quick, with no way to recoup it.

There's lots of horses that would pay you more, but those usually aren't the horses that are going to win.

Unlike gambling, there is a bit of logic can be employed here. I'm told the best way to pick a winner isn't to know horses, but to know trainers. If you know trainers, you can trust them to know the horses.

But that's not any more foolproof than any other "system"--underdogs are horse racing heros.

Proud of Myself

The previous post is the first time the Blogger spell check has not had to correct my spelling of the word exercise.

I was surprised the other day to find, among old papers, a spelling test from 9th grade journalism in which I misspelled exercise exactly the way I still misspell it now.

I may have finally broken a life-long bad spelling habit.

Even more ironically, when I went to spell check this post, the machine had to correct both misspelled and misspell. Two S's, Erik, two S's.

Making internet spelling more accurate, one word at a time.

A New Diet Idea

I've come up with what I think is the best diet ever. It makes perfect sense to me, and I'm curious to see what you all think of it. And it goes a little something like this . . .

I was reading an article about weight loss that explained why most diets don't work. It explained how the body "adapts" to diets after a while. If you eat 1500 calories a day, your body will regulate itself to where it burns 1500 calories a day. If you eat 2000 calories a day, your body will adjust itself to burn 2000 calories a day.

Then, when you finally break down and eat an extra 1000 calories (not hard--I have a bag of Jelly Bellies sitting next to me I got in my Easter Basket that's calling my name and has 700 calories in it), none of it gets used, and it all goes to fat.

This article argued you should actually do the opposite--eat at a certain level, and then drop your calories drastically for a day or two, then go back to your regular eating pattern.

Now look--that's insane. Don't even try it. That just sounds to me like "Hollywood Diet"--a diet that consists of nothing but drinking juice for a weekend.

Diets like this do not help you lose fat. When your body needs energy for the short term, it does not go to fat. It goes to the sugars in your muscles. It saves the fat for last, lest your attempt to starve it go on forever.

So what good idea did I get from this diet?

I combine it with an idea I got from my Dad a while back.

Go find a calorie calculator. They're all over the place online--here's a good one.

In the calculator, don't put in your current weight--put in the weight you want to be. Don't put in any exercise or anything--just what your regular lifestyle would cause your body to burn if you were your ideal weight.

Then eat that many calories every day. Spread it out over five or six meals, but eat that many calories or less--maybe as many as 500 calories less, but no more than that.

Top that with some exercise to burn a few more calories.

Your body's natural inclination to slim down will work together with your exercise to get you down to your ideal weight.

Not a "Lose 20 pounds in one weekend" tabloid diet, but a very safe, sensible way to get your body where you want it.

So the Hollywood Diet guys sell gallons of the stuff, while I still get about 20 hits a day. Maybe I should try going for a little more hype.

Interest-ing

From Dave Ramsey's Financial Peace Planner:

Now let's move to a bigger ticket item--the family car. Car payments can be the biggest waste of money! Who wouldn't love to drive paid-for cars for the rest of his life? The power of compounding interest can help.

J. G. and Jill bought a used car for $4,100 cash. Even though they won't need another car for a while, they decide to start saving for the next one right away. So they put $200 a month into a mutual fund at 10 percent interest. By year seven, they will likely need a new car, but will be ready. Their savings will have grown to approximately $24,190. Now they can buy a new $16,000 car, have no monthly payments, and still have $8,190 in the bank.

After buying this new car, J. G. and Jill decide to continue saving for the next car, but they cut back their monthly payment to $100. At the end of seven more years, that $8,190 left over plus the $100-per-month investment grows to $28,540. Again, they have a seven-year-old car they want to dump for a new one. So they buy yet another $16,000 car for cash, leaving $12,539 in savings. For another seven years, they have no car payment, but they quit saving. Even so, the $12,540 at 10 percent will grow to $25,179.

The bottom line: By sacrificing with a lesser purchase up front and saving the difference, J. G. and Jill can drive paid-for cars and have savings the rest of their lives. That is compound interest working for you.

Tale Of The Tape: Oops.

Pulled pork sandwiches. Buffalo Chicken Pizza. Jelly Beans. Fried Chicken Drumsticks. Biscuits, gravy, sausage and eggs. A cupcake. Peeps. Chocolate (of course).

All this is my way of sayin' I hope you had as good an Easter week as I did.

In my defense, I am now 241 with shoulders, instead of 241 with no shoulders.

Sunday Book Review: How To Ruin Your Financial Life

Ben Stein.

Actor. Game show guru. Author.

In this follow-up to his tongue-in-cheek How To Ruin Your Life, Ben Stein spot-on hits the sure path to financial doom and in so doing, not only mocks the ways we justify some of our stupidest ideas, but makes the path away from financial ruin pretty clear.

Glancing at the table of contents, we see gems like:

Repeat After Me: "I Am Not Responsible For My Financial Well-Being"
Don't Think About Retirement--It's A L-O-O-N-N-G Way Off
Make A Point Of Watching Those Late-Night Financial Success Infomercials
Put All Your Eggs In One Basket--'Cause Only Sissies Diversify

It's light reading. It's a small book and only about 130 pages long (I read it standing around at an unnamed Big Chain Bookstore).

But it's witty, easy to understand, and it gets its point across. It would make a great gift for a grad or a Newlywed--a book that would introduce the simple concepts everybody should know, but that was witty and entertaining instead of boring and preachy.