How to Make Elite Babies

 Advice, Controversial  31 Responses »
May 222013
 

Want kids some day? ;) What if not every toddler is born equal and that there is a secret formula for making elite babies? I apologize in advance because the point of this post is to try and use probability to potentially give our future offspring a competitive advantage in life over their peers, and by the nature of the subject some parts of this article may contain offensive stereotypes or racism.

The Birth Date Effect
13_05_soccergameThe University of BC published a study that shows January and February babies are almost twice as likely to become CEOs than those who are born later in the year. The study investigated the birth-date effect in a sample of 375 CEOs from S&P 500 companies. Older students born earlier in the year are singled out as leaders throughout their school life and tend to do better than the youngest, who might be less developed. This Relative Age effect (RAE) is well documented in the world of sports as well. In an elite hockey team the best 40% of the players will likely be born between January and March. Early success is often rewarded with leadership roles and enriched learning opportunities, leading to future advantages that are magnified throughout life :) Even the BBC believes there is evidence that children born in the Summer months suffer in school.

The Mixed Race Effect
13_05_weddingSome studies suggest mixed-race people are more attractive and disproportionately successful in many professions. According to Darwin’s hypothesis on heterosis, crossbreeding leads to offspring that are genetically fitter than their parents. Although mixed-race people make up a small proportion of the population, they are over-represented at the top level of a number of meritocratic professions. Halle Berry, Keanu Reeves (quarter Chinese,) Lewis Hamilton, Tiger Woods, Steve Jobs (half Arab), Just to name a few.  Not sure why I and many of my friends find mixed-race people attractive but studies suggest that good looking people do in fact earn more money.

The Name Effect
Are some names more successful than others? Apparently yes according to the online job site TheLadders which analyzed the first names of their 6 million members against variables such as industry, salary level, and location. They found that people with shorter names make more money than those with longer ones. The top 10, highest-paid, executive names earn, on average, 10%more than other names. And unusual names such as Apple or Moonbeam and names that sound African American such as Tyronne and Jamal were not viewed as positively compared to more common names like John and Susan. They tested 24 pairs of similar names like Steve and Stephen, Bill and William, Sara and Sarah, etc, and in all but one case those with shorter names earned higher pay. They’ve concluded that every extra letter in a person’s first name may reduce his or her annual salary by $3,600. They’ve even identified the top 5 highest paid female and male names in their study.
Female names: Lynn, Melissa, Cathy, Dana, Christine
Male names: Tom, Rob, Dale, Doug, Wayne
This isn’t the first study of its kind either. In 2011, LinkedIn reported that American CEOs do often have short names, or nicknames like Peter, Jack or Tony.

13_05_babysceptical

So to ensure that our children will have the best possible start in life we just have to find a partner of a different ethnicity than ourselves, get really frisky in April and May (゜o゜), and name our kids something like Cathy or Rob :D Then statistically our kids would have a better chance than most others to be top in their class, better leaders, more athletic, and make 6 figure incomes ;) And now you know the secret to making elite babies :0) As responsible and loving parents-to-be shouldn’t we do our best to give our future children gorgeous looks, and the highest probability for success? (^_^)

I don’t mean to imply that one group of people is superior to another, or that attractive people don’t have to work hard for their success, or that Moonbeam is a dumb name. These studies could simply be statistical realities and NOT factors of causality.  And it goes without saying that attitude, education, temperament, and work ethic will effect one’s life much more than how one is born. But unlike those other factors which are dependent on upbringing, the initial circumstances of how one is brought into this world can never be changed, (except names can be legally changed I suppose) :D

I don’t believe the results of the studies are conclusive, but if there is even a slight truth to their findings then it’s something interesting to think about isn’t it? I’ll have to remember these points when I have the “baby talk” with my future spouse ;)

Financial Freedom in 10 years

 Advice, Budgeting, Controversial, Goals  34 Responses »
Apr 142013
 

It’s almost been 5 years since I started this journey to financial freedom. How am I doing so far? As shown on the right side bar I’m making about $5,100 of dividend income a year :) Which is only about 20% of my annual living expenses. So it appears I still have a long way to go but I feel good about the future :D  One thing I could do to reach financial independence sooner is downgrade my lifestyle just a little bit. Right now I live in a large two bedroom apartment, and drive a pretty sweet car. But I realize I don’t need these things to be happy. So I thought to myself what if I lived a more modest lifestyle? Let’s see what this alternative life for me would look like.

Passive Income: $6,500

In order to make life simpler I plan to pay off all my debts. I don’t have enough cash in the bank to do this. Big surprise lol ;) So I’m going to sell my home, car, Saskatchewan farm, gold and silver, and all other financial assets, except my stocks. After fees, commission, and taxes, the total amount resulting from a complete liquidation of these assets should be about $425,000. So after paying off all my $390,000 of debt I will have $35,000 left over :D If I put this all into a diversified portfolio of dividing growth stocks with an average yield of 4% I’ll be making an additional $1,400 a year. Combined with my existing $5,100 mentioned earlier, my total passive income would be $6,500. 

Expense: $12,000

So where am I going to live if I sell my apartment? Thankfully there are many affordable places for rent in the Greater Vancouver area like this cozy little suite for $550, or this one for $580. It’s amazing what you can get for under $600/month. A lot of those listings include amenities I don’t even have today like in-suite laundry, free wi-fi, and cable TV. Wow that would actually be an improvement over my current living conditions haha. I don’t mind living in a smaller place. It’s not like I’m using the entire 800+ sqft space in my current apartment anyway. Since I have no car anymore I’ll be taking public transit to get around. It’s more green anyway ;) Here’s what my new spending would look like.

 13_04_modestlifestyle

Conclusion: $6,500  / $12,000 = 54%

And just like that, if I were to do this today I would already be half way to financial freedom. Woot! Big jump from 20% eh. Who knew just changing a couple of things can have such a big impact on expenses. Besides housing and transportation there wouldn’t be any noticeable downgrades compared to what I have today :) Holy hamburgers, $6,500 of annual dividend income by investing for the last 5 years means in 5 more years I can probably make $13,000 of passive income and actually retire for real.  What an exciting thought! 5 more years. Instead of freedom 35, I can probably get there by 30 :) All I have to do for now is liquidate my assets, pay off all my debt, and downsize a bit. It’s almost hard to believe that people can spend just 10 years of their lives in the rat race and then retire forever by diversifying their investments and living with low expectations, yet the math totally works out. Does that mean I’ll aim for freedom 30 now?

net worth, freedom 35

Of course NOT :)  Although I would certainly enjoy the simple lifestyle of living on a modest income with no debt to worry about, the reality is not so simple. I want to get married some day so a 1 bedroom basement suite probably won’t be enough eventually. There’s also the possibility of having children, and caring for aging parents. I have to look past my selfish desires for freedom and plan for loved ones to be included in my future life beyond financial independence. So selling my apartment, farm, etc right now is probably not the wisest plan to build long term wealth eh? ;)

Nevertheless it’s very reassuring to know that if I became unemployed tomorrow I should have a pretty good financial cushion to fall back on. This sense of security is more important to me than going on extravagant vacations or leasing a new Lexus, and is also why I will continue to invest my savings and use financial leverage to build up even more passive income! I was talking with my realtor last week and he said the farm I bought last year with $20,000 of my own money has appreciated by $10,000 already, which makes for a 50% return on investment so far (゜∀゜) Check back later this month as I’ll update the official numbers on my blog when the FCC publishes their semi-annual farmland value report. This is why investing rules! Luckily the kinds of assets that I’m heavily invested in like stocks, housing, and rural land, have all performed relatively well over the last 5 years especially in North America :D  But how will my luck fair in the next 5 years? We’ll just have to wait and see ;)

Coping With Debt

 Advice, Controversial, Debt  36 Responses »
Nov 132012
 

Do you have debt? Whether it’s $5,000 in credit card debt, $30,000 in student loans, or a $100,000 mortgage, debt can be stressful for many people. Well here are some things you can tell yourself to feel better about your debt :)

1) I’m in my mid twenties and I have over $230,000 of debt which includes a hefty mortgage, $7,000 RRSP loan, and more than $20,000 in a margin trading account. I used to have over $10,000 of student loans as well, but paid that off early since it had a relatively high interest rate. I have plans to increase my total debt owing to over $300,000 by the end of this year after I secure a loan to buy a piece of property I was looking at. If someone like me with an average salary can go this deep into debt and still sleep like a baby at night, then you probably have nothing to worry about (^_~)

2) Debt is a depreciating liability. You know how you can stash away $100 under your bed, and by next year it’s only worth $98? What happened to the $2? Inflation happened right? The rising cost of living can be a pain, but it can also be a gift to people who have debt. If you owe the bank $100 for example, then by next year if you haven’t touched the principle, that $100 balance you owe will only have $98 of purchasing power which means it’s EASIER for you to pay it back. So my $230,000 debt, assuming a 2% inflation rate, will only be worth $225,400 by next year. Wow, I just increased my net worth in REAL terms by $4,600 without even paying back any principle :0) Thank you inflation! Take that TD Bank! lol. The US has over $16 trillion of national debt. And its growing by billions of dollars every day because their government continues to spend more than they take in. Actually our Harper government is not doing that much better (>_<) But anyone who can do simple math understands this trend can’t continue forever.. or can it? Mr. Bernanke, the person in charge of monetary policy in the US explains-

 3) Interest rates are low. If you see a potentially lucrative investment opportunity whether it’s to give yourself more education, renovate the home, or start a retirement plan, then going into debt to fund these things to make your life better is okay (^_^) Don’t feel bad about taking advantage of easy credit.

At the end of the day, just remember that DEBT is only as bad as we think it to be. Nobody appears to be losing their hair over our public debt in Canada, which sits at about $32,000 per person. However when we take on a $10,000 car loan it can become this daunting burden, and we stress over how to pay it off ASAP.  But if anything, I think public debts like the ones held by CMHC, and our Provincial debts (AKA Ontario’s) should be a bigger concern to the quality of our and our children’s lives in the future.  You can pretty much rationalize debt any way you want. It can be scary, or it can be no big deal. Sometimes it’s just all in our heads (＠_＠;) I’m just trying to say nobody likes to have debt, but if you do, don’t worry. As long as you have a plan to deal with it, there’s no reason to let it get you down. Just relax and enjoy life :D

Beauty Discrimination

 Controversial  36 Responses »
Nov 072012
 

Ever wondered why you make less money than other people who do the same work as you? If so, then you may be a victim of beauty discrimination, which is a serious matter (ಠ_ಠ)  and affects millions of ugly people every day. According to an article from nydailynews.com, “Handsome men earn, on average, 5 percent more than their less-attractive counterparts, while attractive women make 4 percent more. Over the course of a good-looking man’s career, he will earn roughly $250,000 more than a comparable, yet unattractive, employee.”

Egad, I know for a fact that I’m making below average wage in my field of work (media design) but I think that has everything to do with my limited work experience and not my level of attractiveness, at least I hope…(＠_＠;)

The article further explains “the less good-looking you are in America, the more likely you are to be poor, receive worse performance reviews at work, and get a longer prison sentences if you land in jail. And you’ll be going through it alone – unattractive people are also statistically less likely to be married.”

Ouch, that’s pretty darn depressing ＿|￣|○ Managers also put a heavy emphasis on looks. When asked to rank factors that come into play when evaluating a candidate, appearance was a higher priority than where an applicant went to college.

 

“This is the new reality of the job market,” explained one New York recruiter. “It’s better to be average and good-looking than brilliant and unattractive.”

Seriously society? Are we really that shallow and materialistic? So much for inner beauty eh *sigh* (-_-’) I used to think spending money on plastic surgery, botox, or other cosmetic procedures were just for losers who had low self esteem. But now I realize I had it all wrong before (゜o゜). From a financial point of view making yourself look more attractive is apparently one of the best investments you can make in your lifetime. If you’ve had cosmetic surgery before, what was your reason to do it?

Personally I think I’m a solid *above average* looking chap (^_-)  However, if I went in for some cosmetic dentistry and eyelid surgery, and maybe even a nose job, then I can potentially make a quarter million dollars more throughout my career. And I do have the required capital (~$30,000 at most) to pay for it all today, which is well worth the investment if the study is correct. Wow, I can’t believe I’m actually considering doing this now (o_o)

 

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