Welcome back for yet another edition of the Carnival of Twenty-Something Finances.  This time around, we’re going to do something a little different, highlighting not only some of the best personal finance advice directed at young readers, but also one of the most prominent archetypes in pop culture: the evil clown!

Why are evil clowns so common in popular media?  I’m no expert (it’s been years I picked up a sharp knife and slapped on a bright red nose), but I’d say that it has to do with the combination of innocence and horror.  By confronting the terror that lies underneath the goofy facade, we are able to confront the terror that besets us during childhood.

In the same way, by confronting the troubles we have with money, we are able to grow and move past our previous problems, building up our knowledge and skills as we grow.  (See?  I tied in the theme, just as I always intended to do.)  To help you get the most out of your money, enjoy the following articles, complete with information on some of the best evil clowns in history.  Let’s start with the best articles from under the big top!

Best Show Under the Big Top

The Dark Knight (c) Warner Bros.

It’s hard to have any discussion of evil clowns without mentioning the Joker from Batman comics.  Besides being of the oldest evil clowns in pop culture, he’s also had a recent revival thanks to the release of The Dark Knight last year.  A complete catalog of all his depraved schemes over decades of comic book, television, cartoon, and movie appearances would fill this article many times over, but make no mistake, this is the clown by which all other evil clowns are judged.  In the same way, the articles below represent the best of the personal finance world, and the cream of this carnival’s crop:

How to Use Credit Cards Without Bankrupting Yourself – I’m as much a fan of credit card usage as the next guy, and I prefer using my credit card to debit or cash whenever possible.  That said, it’s important to follow rules, such as those laid out on the Canadian Finance Blog, to ensure that you use the credit cards, and not the other way around.  Otherwise, you could end up as a statistic about the overuse of credit in the Western world.

21 Tips to Save Money in College – A wealth of tips for saving money during your college years from 21 and Broke.  Most of them are very good for the poor student trying to make their money stretch to the end of the semester.  I only wish that I had known more of these tactics when I was in school (and had access to things like Hulu and Skype).

EverBank Review – On The Digerati Life, there is a review of EverBank, an online bank.  One of the more interesting offering is CDs denominated in foreign currencies, one possible way to diversify your holdings in case the dollar continues to decline world-wide.  The yields aren’t half bad, either.

The Long Road to Getting Life Insurance – If you have dependents who rely on your income, it’s good practice to have life insurance.  Unfortunately, getting a life insurance policy can be a long process, as noted by PT Money.  If you want to know what needs to be done to get your coverage, be sure to check it out.

More Discussion on the Homeschool Issue – Stew of Gather Little by Little answers some questions about home school in general, and his decision to home school his children in particular.  It’s an interesting idea, although being public schooled myself and a few years away from having children (if all goes according to plan, at least), I haven’t done too much research into the issue yet.  Something else to consider when I have little rugrats, though.

Budgeting and Money Management

Sideshow Bob (c) Matt Groening and Gracie Films

He might not be the most obviously insane clown, but make no mistake: Sideshow Bob is evil, pure and simple.  He’s also smart, and dutifully plans ahead.  From his plans to frame Krusty to his campaign to become mayor, he makes sure to create a plan and then follow through.  Too bad he keeps getting foiled by children… For some non evil ways to plan ahead, consider the following articles:

Considering a Health Savings Account – Trying to figure out whether to open a health saving account, as with many important financial situations, can be a tricky decision.  Luckily for you, some of the pertinent data on health savings accounts can be found on Peak Personal Finance.

The Best Free Online Budget Tracking Tool – On MoneyStance, you’ll be able to get a full review of the MoneyTrackin tool, as well as seeing just how said tool works.  Not a bad looking tool, and good luck to MoneyStance on meeting the goal of a half million dollar net worth!

The Basics of Building Wealth – A short, pretty basic article on how to get your finances in shape, courtesy of Finavigation.  If you’re new to getting your finances in order, this will be a good place to get a broad overview; if you’re a seasoned pro, consider it a helpful review to keep you on track.

Money Management as You Approach Retirement – Most of us hope to retire, and here we have some advice on how to manage our money as we approach retirement from Associate Money.  Although actually, most of the advice (like investing for the future and avoiding credit card debt) makes sense for just about every age group.

Saving Money

Pennywise (c) Stephen King

One of the most horrifying characters from an author specializing in terror, Pennywise the clown was the ‘It’ from Stephen King’s It.  It’s worth mentioning that the name is actually taken from an old saying, ‘Penny Wise, Pound Foolish’, indicating someone who pays close attention to the small expenses but allows the big ones to overtake him.  If you want to be ‘Penny Wise AND Pound Wise’, you’ll need to pay attention to all your spending, and take advice like this below to cut your expenses whenever possible:

Coachsurfing to Save Money and Make Friends – Apparently when I wasn’t looking, crashing on the coach of a complete stranger went from being completely unacceptable to a popular way to travel cheaply.  True Adventures in Money Hacking shares a story of sharing houses in Costa Rica, as well as provides some links to resources if you want to have some adventures of your own.

The Argument Against Frugality – It sounds almost blasphemous, making an argument against frugality on a personal finance website.  Well, don’t panic; The Sun’s Financial Diary is actually making a point that most of the arguments made against being frugal are actually incorrect.  Check it for some ammunition the next time your friend tries to tell you there’s nothing wrong with splurging a little.

Black Friday Wisdom – A bit late for this year’s shopping orgy, at least by the time this carnival will go up, but perhaps the tips shared by the Personal Finance Analyst can help you out for next year.  Better yet, just spend the days between Thanksgiving and Christmas avoiding any shopping center (save for grocery stores or drugstores) and save yourself a lot of trouble.

Biking to Work is Not Only Good for Your Health, but Your Wallet – It’s probably obvious, but the less gasoline you personally burn traveling, the less money you have to spend.  As Michal on Energy Saving Gadgets notes, biking to work (assuming it is possible, of course) is a great way to get your exercise and keep more money in your wallet simultaneously.

How to Buy Craft Supplies on eBay – While the article from Craft Stew focuses pretty squarely on craft supplies, the advice listed is pretty good no matter what type of item you’re planning to buy or what online store you intend to use.  It’s definitely worth a read through, even if the closest you get to crafting is to walk by the craft store when you’re at the mall.

Getting Out of Debt Is Lonely -  Debt Kid shares more about his financial life with his blog readers than with many members of his family.  I can relate; I put my net worth online, but barely talk to anyone in my extended family about my financial goals.  Anyway, keep up the good debt eliminating work, Debt Kid, even if most of your friends know nothing about it!

Credit

Buggy the Clown (c) Eiichiro Oda

As you might know from my previous stints hosting this Carnival, I like Anime.  Anime has its own evil clowns to handle, including Buggy from One Piece, who has the power to divide his body into individually controlled pieces (yes, it’s just as weird as it sounds).  Similarly, when dealing with credit card debt, your best tactic is to divide and conquer, taking each debt in turn (while paying the minimum on the rest, of course).  For more good advice on handling credit, read on:

Best Credit Card – Which credit card is the best is the source of some long, if not particularly heated, debates.  Luckily, Financial Highway has a list of items to look for when considering which credit card to take.  His last comment, on remembering to be responsible, is important no matter which credit card you finally choose.

Are 0% Balance Transfer Credit Cards for Life Possible? – An interesting question posed by Money Ning, about a card that would be the holy grail of many less than responsible credit users if it really existed.  As noted in the article, though, recent changes in credit card laws mean that such cards, will likely cease in the near future, if by some odd chance you could find them before.

Capital One Classic Platinum Credit Card Features – A review of the Classic Platinum Credit card from Capital One, as written by One Mint.  My personal favorite feature is the ability to put your dog’s picture on your card.  I just have to ask, how many people really need that feature?

Visa Black Card Review – Another credit card review from Ask Mr. Credit Card, this time of the Visa Black card, a prestige credit card.  The $495 annual fee is a bit high for my taste, but if you want to take advantage of some the special services offered to card holders (like 24 hour concierge service), it might be worth a look.

Gift Cards

Killer Klowns (c) The Chiodo Brothers

With the holiday shopping season upon us, you’re going to be looking for gifts for some of the people on your list for whom you don’t have any good gift ideas.  In those situations, why not go for one of the great classics of American cinema, like Killer Klowns from Outer Space?  Or, if your recipient has any taste, consider a gift card, after you read the cautions listed below:

An Argument for Giving Gift Cards – Bob of Christian PF takes on the increasing popular trend of giving gift cards, as well as Joel Waldfogel’s advice (which seems to be everywhere this year) that giving gift cards makes much more economic sense than actually choosing a gift.  While that might be true, I (and Bob, judging by his comments) would hate for Christmas giving to be determined by economic expediency.

New Regulations for Gift Card Holders – Speaking of gift cards, it’s important to know what sort of penalties or other restrictions are attached to the cards.  As American Consumer News notes, new rules to control such penalties will be in place by 2010’s holiday season, but for now, you still need to watch for such ‘gotchas’ when you purchase gift cards.

Investing

Violator (c) Todd McFarlane

Investing is the process of putting your time, treasure, and effort into building up your assets.  One evil clown who has plenty of experience in this process is Violator from the Spawn comics.  Charged with the task of training Hellspawn to serve in Satan’s army, he has plenty of experience in growing his ‘assets’ over time.  Hopefully, you’ll take a less diabolical route when it comes to your investing, and some ways to do so can be found below:

Investing with Stock Trading Services That Teach – So, you want to learn how to trade stocks?  Then head to The Smarter Wallet, young man, and you’ll find plenty of good advice on learning to trade via online communities and stock trading communities.

Ten Myths About ETF Investing – A very thorough, very complete guide to ETFs from the ETF Database.  While having an obviously pro ETF stance, the commentary is solid, and the advice on ETF uses and benefits is sound.  If there’s anything you heard about ETFs you want to confirm as true or not, this is a good place to start your research.

Miscellaneous

Krusty (c) Matt Groening and Gracie Films

More apathetic and greedy than truly evil, Krusty the Clown from the Simpsons is the stereotypical lifelong showman who’s long since begun to phone in his performance.  (I’m including him simply because I need another clown, and I’m a big Simpsons fan.)  The lessons that can drawn from Krusty’s appearances are many and diverse, from the importance of always paying your taxes to the impact of celebrity endorsements on product sales.  In the same way, these last few articles are diverse and show a variety of different themes.  Read on:

Sccusesufl Peosrnal Finnace Deos Not Riqueire Perftceion – If you can read this title, congratulations!  You just proved research from Cambridge University correct, showing that not all the letters in a word need to be in the right order for it to make sense.  Similarly, The Dough Roller reminds us that we don’t need to get every detail of our personal finances right in order to succeed financially, as long as the big things are done right.

IPodMeister: Trade your CDs for an iPod or iPhone… legally? – Now, this is an interesting one.  Lazy Man and Money raises a few very good questions about digital copies and Apple’s copyrights while using a service called iPodMeister.  Frankly, with as many questions as he raises, I’m inclined to avoid this service for the foreseeable future, at least until any potential Napster-esque legal battles get settled.

I Believe These Events Are Inevitable – I’ll be completely honest: I don’t agree that everything on this list from My Wealth Builder is an inevitability, particularly the health care related predictions.  That said, I will gladly admit that I may be wrong, and certainly it doesn’t hurt to be prepared for the worst, even if it never comes to pass.  Better to be caught with an umbrella on a sunny day than without one when it pours, after all.

Multiple Intelligences: Why You’re A Green Rock Star but Suck at Saving Money – A discussion of the different types of intelligence and how they affect our ability to manage money, from Tyler of Frugally Green.  Understanding how you live, learn, and grow is vital to being the best you can at developing your skills, whether we’re talking money, music or anything else in life.

• Personal Finance Links ("Big Sign" Edition)
• Sunday Money Madness - Blog Action Day Edition
• Subscriber Swap Saturday: No Debt Plan
• Pay Off Debt Or Invest - Well, It Depends.
• The Key To Living Frugally

Ah, the days after Thanksgiving, when it is practically traditional that you spend the whole time unconscious and trying to digest the food you were devouring on Thursday in between football games and uncomfortable talks with family members you only see once a year.  (Or is that just my Thanksgiving?)  Anyway, hopefully everyone had a good, relaxing holiday, because it’s back to work on Monday for everyone who still has a job!

Speaking of jobs (and my lack thereof), my big news this weekend is that I’m getting unemployment again!  Now, don’t get me wrong, I’d much rather be working and getting paid than collecting unemployment (and not just because unemployment only covers a fraction of what I was earning, even after all the taxes I paid on my income were taken into account), but it’s a nice safety net to have available.  It also means that I don’t have to worry quite so much about making ends meet for next few months, which is especially helpful given the forthcoming holiday season.  So, all in all, some pretty good news for me on that front.

Let’s see where my finances stand, given this new source of temporary income:

Not too much to report; I put more money into my Roth IRA which did a good job of off setting the recent downturn.  Getting money deposited into my checking account did my net worth a world of good, and hopefully I’ll continue to make progress in growing my net worth.  (I’ll reach you some day, one million dollar net worth!)

• Calculating Net Worth: Should Home Values Be Included?
• 4 Modern Ways to Get Rich by Saving Money
• Compare Net Worth with other Baby Boomers
• A Brief Net Worth Update
• Net Worth Update - December 2007

There are a few books in my personal finance library that I rely on much more than the others.  Sometimes, it’s because they provide information on a relatively obscure part of the personal finance universe, one for which I have few, if any other references.  Other times, it’s because the book provides a unique and different perspective that I like to have at my disposal.  In a few rate cases, though, I keep a book close at hand because it is just so full of good information about money and investing that I don’t want to risk misplacing it.

Essential Money by Peter Sander is one of those last types of books, the ones which I’ve come back to time and time again.  I’ve found it to cover a wide range of material, and to do so quite competently.  But will you feel the same way if you read it?  Well, to find out, let’s look under the cover…

Summary

Essential Money has twenty-four chapters, covering almost every aspect of personal finance that you could want to learn about.  Although there aren’t any explicit groupings of chapters, they are arranged roughly according to subject.  The first four chapters cover the preliminaries of getting your financial situation under control, including taking a look at your personal finances, keeping track of your assets and liabilities, and learning a bit about personal finance math (this last chapter is especially full of good tables and equations to help calculate your personal financial situation).

The next few chapters cover some of the basics of budgeting and saving.  There’s a chapter on budgeting, another on how to spend your money (including six things to avoid buying), and a look at choosing the right bank for your needs.  There’s also a chapter on credit, pointing out how to get (and keep) a good credit score.

As you’d probably expect from a book attempting to cover the essentials of money, there’s quite a few chapters devoted to investing.  Stocks, bonds, and mutual funds are covered in several chapters, after a brief introduction covering the various resources available for the would-be investor.  This section finishes with chapters on real estate investments in general and owning your own home in particular.

The next few chapters are a bit of a hodgepodge; they cover a variety of important topics, but there are few connecting threads, mainly planning for the future and other longer-term goals.  There’s a chapter on risk management and insurance (with a bit on annuities thrown in for good measure), a few chapters on taxes, and a chapter on college planning.  There are a few chapters on planning for retirement and a chapter on creating an estate plan.

The book finishes on preparing for life transtions, from marriage and having children to (knock on wood) divorce and losing your job, as well as creating your financial plan.  The final chapter covers the basics of building a long term financial plan, from setting you goals (which involve both a time frame and a measurable criteria to determine when it is met) to getting professional planning help if you need it.

Pros

-A Wide Range of Topics: Look back over the summary; there’s dozens of financial issues that are included in this book.  There are few basic issues in the financial world that aren’t included somewhere in this book, and it makes a good introduction to most of them.  (The subtitle of the book is ‘Everything You Need to Manage Your Personal Finances Wisely’, after all.)

-Lots of Tables and Equations: Alright, this might only be a plus for the math nerds like me, but there are lots of mathematical calculations included in the book, covering a variety of topics.  I’ve even included cribbed a few of them for my blog when the need arose.  Add in example financial worksheets in the appendix, and you’ll have most of the tools you need to track and control your financial planning.

-Informative, Not Compulsive: Many personal finance books are written by people who want you to follow their financial plan (and only their plan).  This is not one of those books; after presenting you with the information and tools, Sander basically allows you to use them as you desire to reach your goal.  If you are a good self-starter, this might be the personal finance book for you.

Cons

-Lack of Depth: Look over the summary once more (this is the last time, I promise).  As you might surmise, with such a large number of topics, the amount of page space that can be devoted to each topic is fairly short.  If you are looking for information beyond the basics for any of the topics mentioned, you will need to find another resource.

-Missing Information: This is something of a symptom of the previous problem; with so little space and so many topics to cover, somethings are going to be missing.  However, the specific topics that aren’t covered sometimes make little sense (for example, the mutual fund chapter doesn’t cover index funds, but does include ETFs).  Getting a complete picture of all the options you have will require additional research beyond this book.

-Overwhelming Data: You might think with subjects not being covered (or at least, not covered completely), that it would be hard to get overwhelmed.  But with all the information available, as well as short length of space, Sander has a tendency to throw everything (and the kitchen sink) into some of his descriptions and lists of advice.  If you’re starting from scratch with your financial education, you might find yourself trying to remember too much, too quickly while reading this book.

Overall

As I said at the beginning, I like this book and refer to it frequently.  The best way to treat Essential Money is as a reference book, like a dictionary or encyclopedia (or a school text book), rather than something to read through cover to cover.  If you are just getting started on managing your personal finances, it makes a decent book to read for background information, although other books might be more helpful in building your own financial plan.

• Book Review: The Hal Leonard Acoustic Guitar Method
• Roundup for week of 18 November 2007: Furnace fire edition
• This P has to be more J about his finances
• Finance Fiesta No. 3: The Spanish Money Proverbs Edition
• Money Hacks Carnival #75 – Get a Job Edition!

Happy Black Friday, everyone!  Hopefully, those who ventured out into the malls and shopping areas today (while following my advice, of course) purchased everything they needed and wanted today, without any incidents.  There’s definitely no deal if you to get wounded in the process.

Now that all your shopping is out of the way, of course, it’s time to turn your attention toward giving to the less fortunate.  If you’re planning to give in the next few days, you have some very good timing; donate between now and the end of the month, and Flexo of Consumerism Commentary will match your contribution with one of his own to the World Food Programme.  If you want to double the impact of your contributions, there are few better times (even before you take the whole ‘holiday season’ thing into account).  Now, on with the good articles of the past week.

Good Articles This Week

Fees Suck-Don’t Pay Them – The always pithy and witty Stephanie of Poorer Than You shares some tips on avoiding the large and ever increasing number of fees that infest our daily lives.  Her chief piece of advice: negotiate your fees whenever possible (and never assume that it is impossible until you try).  Great advice, and definitely something to try next time you make a major purchase.

Do You Really Want to Make Money Fast? – It’s a basic fact of human nature: we all want to get wealthy quick.  But Studenomics points out some of the problems with getting large amounts of money quickly; sadly, it tends to disappear just a quickly.  Still, I wouldn’t mind getting my own chance to show what I would do with a sudden, vast fortune, if you know anyone giving one away.

Hulk vs. Eeyore: A Six Step Process to Overcoming Friction In Life – I had to include this entry, if only as an example of one of the most lopsided possible battles in history.  (Eeyore can take the Hulk easily; don’t let that down-turned face fool you, he’s a vicious fighting machine.)  Anyway, Baker of Man vs. Debt provides some advice on avoiding emotional eruptions (Hulk mode) or just giving up (Eeyore mode) when we are confronted with problems in life.

Why Government Regulations Sometimes Work – It’s easy to assume that all government actions do is decrease the performance of the free market (especially as that is a major theme of many financial commentators).  As My Life ROI points out, though, there are things that the government can handle better than private individuals and companies, particularly when it comes to those darn externalities.

Everything is Relative-Being Happy With What You Have – The Financial Samurai shares a few stories from the road (or a recent trip to Japan, actually) about learning to appreciate what you have.  Chances are, if you’re reading this, you probably don’t feel like you’ve got everything you want in life.  On the other hand, if you’re reading this, you have more than many people on this little planet; in this season of thanksgiving, be sure to thankful for everything that being a part of the industrialized world itself has to offer.

• The Family CFO By Mary Allvine and Christine Larson
• Weekly Roundup - Swine Flu Preparations Edition
• Is She A Thief? My Grandmother Takes Ketchup And Cream From Restaurants.
• Book Review: The Dorm Room Diet: The 8-Step Program for Creating a Healthy Lifestyle Plan That Really Works By Daphne Oz
• Give me the beat boys and free my soul…

To all my American readers, by the time this column goes up, you’ve probably had your fill of turkey, stuffing, assorted vegetables, cranberry sauce, and of course, pumpkin pie.  I hope everyone had a very happy Thanksgiving, filled with family, food and the other simple pleasures of life.  To celebrate this season of thanks giving, here is a list of a few things I’m thankful for:

I’m thankful that I am healthy, fit, and have the opportunity to keep myself well without having to struggle simply to survive.

I’m thankful for a loving, if sometimes exasperating, family who cares deeply for me and supports me in everything that I do.  Without them, I don’t know where I’d be right now, but I know I would be much worse off.  Speaking of family…

I’m thankful for my loving fiancée, who has been a major support and encouragement in everything I’ve tried to do, from getting a job to starting this blog and attempting to control my finances.  I love her so much, and she is such a huge boon in my life.

I’m even thankful for my fiancée’s family; from her mother who treats me like a son to her sisters that love me like a brother, it’s wonderful to have future in-laws I’m sure I can tolerate, or even like, rather than feeling like I’ve alienated everyone by taking their Sondra away.

I’m thankful for friends, both online and off, who have been there for me through both good times and bad.  Thanks to them (and you; many of my frequent commenters are among those I consider as friends), I’ve managed to make it through some less than ideal situations, and will continue to keep going.

That’s enough to be thankful for in one post, I think; now, it’s time for me to get going and help make up plenty of turkey.  Happy Thanksgiving, everyone!

Happy Turkey Day Too!

(To all my non-American friends and readers who don’t celebrate the American Thanksgiving, I hope you have a happy Thursday, and tomorrow I’ll be back with some no holiday related content.  Until then, stay happy and well!)

• How To Become Successful By Doing Just a Little Bit More
• Get Up and Dance!
• Weakonomics Weekend Edition: Holidays Edition
• 6 Holiday Stress Reduction Tips
• Deep in the Heart of Texas

Well, it’s nearly here, the biggest shopping day of the year.  Once all the fun of eating turkey, spending time with the extended family, watching football/parades/Christmas movies on TV, and falling into a food coma is over, the shopping frenzy will begin.  It’s almost time for Black Friday to begin, with all the shopping, crazy-early store openings, incredible sales, and general consumer-related madness that occur.

You’ve probably heard the story that the term ‘Black Friday’ was derived from the fact that stores were finally able to turn a profit as a result of the increased spending during the holidays, which means they would switch from using red ink (deficits) in their ledgers over to black ink (profits).  (Although, Wikipedia’s entry on Black Friday seems to put that story down as false, claiming that the real reason is due to police being upset with the horrible traffic on that day; not to put too fine a point on it, but I can definitely believe that.)

A Mall. Not Shown: Horrible Black Friday Crowds

If you want to keep your own finances in the black during the holiday season, be sure to follow this advice:

1) Plan your shopping carefully – Create a list of what you want to buy for everyone during your holiday shopping, and stick to it.  If you have a list and don’t deviate from what’s included, you’ll limit how much you end up spending, and you’ll keep your spending in check.  Assuming, of course, that you have a reasonable and well-defined list that doesn’t splurge beyond what you can afford.

2) Compare the prices – It’s tempting to assume that because some of the things in a store are on sale, that everything is on sale.  But no store will knock down the cost of all its merchandise (definitely not to the point that everything is a good buy), so you’ll still have to be careful and do the proper comparison shopping in order to determine that you are getting the best possible price.  If it’s not on your holiday gift list or you aren’t sure it’s the best price for the item, just leave it; there will plenty of time to pick it up later (there are plenty of sales leading up to Christmas, and even more once the holiday is over).

3) Consider shopping online – In recent years, ‘Cyber Monday’, a huge internet shopping day on the Monday after Thanksgiving.  Shopping online can save you time, money, and having to fight your way through huge crowds in order to get the last Zhu Zhu Pet.  As with shopping in the real world, make sure to do adequate research in order to ensure that you are getting the best deal.

4) Take your own food – If you’re planning to spend your day in the mall, you’re going to need to eat at some point.  While I’m as big a fan of mall food courts as anyone, it’s going to be cheaper and probably much more nutritious to pack your own food and drinks.  A simple sandwich or other meal you can leave in the car will enable you to take a break and then return to your shopping without having to pay for mall food.  That way, you can stay fueled up and return to shopping as soon as possible.

5) Be safe, and be courteous – Every year, there’s some story about someone being trampled to death or otherwise horribly injured when a crowd pushes into a store for some break of dawn ‘doorbuster’ sale.  Please, please, please, if you follow no other advice on this list, avoid the crazy crowds and horrible rushes during the early morning sales unless you are young, fit, and can handle plenty of jostling to get into the store.  (Even then, consider whether it’s really worth it to put yourself through that sort of thing.)  In the same vein, please help anyone you see who is having trouble when you go out shopping, on Black Friday or really, anytime.  Keeping little old ladies from trying to carry 80′ flat-screens by themselves is surely worth a few points with Santa or anyone else who might be keeping a cosmic score.

Above all else, just be careful out there, alright?

• Ultimate Frugality - Ten New Ways For You To Save Money.
• Grocery Store Confessions...
• How To Get the Most Out Of Bulk Shopping
• All you can eat? Yah right!
• Smart Shopping During the Holidays

(Welcome to another addition of Small Business 101.  Today we’re going to talk about bootstrapping, one option you can take while starting a small business.  Let the funding talk begin!)

Q: Alright, just what is bootstrapping?

A: Bootstrapping is where a small business makes due with only a small amount of capital and spends it only as it comes in.  In essence, you treat the business the way you should treat your personal expenses, only spending the money you actually have, rather than relying on debt and borrowing to provide your working capital.

Q: That’s all it means?  Why the odd terminology?

A: The term bootstrapping apparently derives from The Surprising Adventures of Baron Munchausen, an adventure story first published in 1781, wherein the hero apparently pulled himself up out of the swamp by his bootstraps (or possibly his hair).  The idea being to rely on your own skills and attributes in order to make your business (or other venture, as there are several meaning of bootstrapping) a success.  As to why this particular phrase from this particular book became the reference point for this phrase, to that I don’t really have a good answer, other than it sounds pretty rugged and self-reliant.

Q: *Humph* Alright, why try to bootstrap?

A: The alternative to bootstrapping is to get money from an outside source, such a business loan or money from investors.  While these methods do their own advantages (which we’ll get to in a minute), they have the drawback of making your company beholden to outside influences.  You’ll have to ensure that you can meet repayment terms of the loan or the demands of investors on top of all the other requirements of your business endeavor.

When you bootstrap, on the other hand, you’ll only have to worry about satisfying your business’s needs.  There’s no worry that if your business fails, you’ll be left with a bank loan that needs to be repaid or angry investors who may attempt legal action against you.  You’ll also have to work within the limits of your business’s income, the same as with sticking to any other budget (which many people could use more experience doing, if recently history is any guide.)

Q: What are the downsides, then?

A: In a word, money.  Bootstrapping means that you’re going to be relying on your own money to provide all the initial capital you need, at least until you start producing an income from the business that can cover your expenses.  Depending on what type of business you want to start as well as your personal savings, you might be able to finance it with your own savings without a problem.  If you want to start an Internet based business, for example, you’ll likely be facing fairly low monetary barriers.  If you already have a computer, your only costs will likely be for hosting and a domain name, neither of which will cost much more than one hundred dollars a year, if that.

On the other hand, if you have your eye on a business that requires a physical location, you’re going to face much higher expenses.  The cost of the building, renovating it for your particular business, buying supplies, hiring workers (if you need them); all these expenses add to the cost of getting your business off the ground.  If you don’t have a rather large amount of money in your personal savings (enough to start your business while still leaving money for your personal expenses and a hefty emergency fund), you’ll likely need to get funds from an outside source, whether a bank, interested investors, or your family and friends.

Q: If I want to bootstrap my way into a small business, how should I do it?

A: The first step is to make sure you do your research and learn just how much time, money, and other resources you’ll need to put into your business.  If it is something you can do part time, like wordpress.com/” target=”_blank”>starting a blog, making and selling crafts, or selling artwork, you can continue to work a regular job and build your business during the nights and weekends (a very popular method of expressing your entrepreneurial desires).  If your business plan involves more involvement, things get trickier; you could find yourself a partner (or more than one), split the duties with your wife or husband, or perhaps even rely on your spouse’s income if you leave your job to build up your business.  There are almost as many ways to pursue your dream as there are dreams out there, you just need to find the one that will work best for you.

That’s it for bootstrapping; good luck pulling yourself up by your bootstraps, everyone who’s looking to start their own business!

Additional Resources

Entrepreneur Magazine’s take on Bootstrapping

Ten More Tips from Entrepreneur

Ten Bootstrapping Lessons From VentureBeat

• Online Internet Business
• Online Business Startup Opportunities Can Be Very Expensive
• Reasons Of Why You Should Make Your Own Business
• Online Business And Its Key Aspects
• Starting An Internet Based Business - Break Out The Restraints Of The Corporate World

If you’re a typical student, there’s a lot you still have to learn about investing.  Actually, if you’re a typical high school or college student, there’s a lot you still have to learn about most things in life, but investing is a big one.  There’s very little formal education you will receive about investing (or any other money management skills, for that matter), and many things that need to be learned.

I’m not saying all this to discourage you, but rather to point out the task you face.  If you’ve stumbled across The Amateur Financier, chances are that you’ve at least begun to seek out personal finance information on your own, which is an excellent start.  To help you get a good start to your financial future, here are some tips straight from Roger:

1) Start Investing Now – Being a young whippersnapper does have its advantages every now and then.  If you’re young, there’s lots of time for your investments to grow.  I touched on this last week; the longer you invest, the more your money will grow, and less you need to invest in order to reach your goal.  Start while you are in college (or even better, during high school, although you might need to use a custodial account under your parent’s name to do so) and even small amounts can turn into a decent retirement fund.

2) Get Good Grades – Particularly for you high school students, getting good grades should be task #1.  Good grades open the doors to more impressive colleges, and make it easier to get scholarships or other aid packages once you get into school.  Even if you don’t want to go onto college (if you want to join the armed services or start your own business, for example), making sure you get everything you can out of your education will help you to get a leg up in life, if only by expanding your personal level of knowledge.

3) Expand Your Experiences – It’s easy to get locked into a particular way of thinking or doing things, particularly if it’s a way that’s always worked for you.  But when you’re young and have relatively few obligations to fulfill (such as a family or a job), that’s the perfect time to do things that you’ll be unable to do in the future.  Take some classes outside your major, try a few part-time jobs to learn what you like to do, even try starting a small business in your free time (blogging is pretty fun, for one); it’s an excellent time for you to explore your options.  Speaking of which…

4) Take Some Big, Foolish Risks… -Speaking of experiences, youth is the perfect time to do stupid things.  Not just things like drinking until you pass out at a college party, but also things like trading stocks, making highly speculative investments, or generally doing everything that most investment financial guides tell you to avoid.  As mentioned before, when you’re young, time is on your side; even if you end up penniless at thirty because of some bad investment decisions, you’ll still have decades to recover before you need to rely on your savings for your living expenses, plenty of time to recover.  (Actually, if you find yourself with a net worth of exactly $0 at age thirty, you’ll be doing better than many people who are loaded up with debt at that age; that’s an accomplishment itself.)

5) …But Don’t Be Too Stupid – There’s a difference between taking on risk, even incredibly high risk, and being stupid with your money.  Day-trading stocks is highly risky and potentially hazardous to your wealth, but giving your name and identifying information to someone offering you Nigerian prince money is just plain stupid.  Even while you are taking risks, including potentially big risks, be careful with your financial information and don’t do anything that could seriously impair your wealth in the future.

6) Always Read The Amateur Financier – Alright, alright, this one is a little tongue in cheek.  But continuing to read and build your knowledge about money management throughout your life is an important step to controlling your finances.  Thanks to the Internet, it’s as easy as turning on your computer and looking through all the resources you have available online.  Some worthwhile first stops include Morningstar, Investopedia, and Vanguard, all of which have excellent resources for investors who are just learning the ropes.

There you go, hypothetical high school or college student to whom I’m directing this post, several things you can do to get your finances off to a good start.  Enjoy the head start on financial wellness!

• Should They Teach Personal Finance In High School?
• Automated Forex Robots: Trade Forex 24 Hours A Day
• Investing Rules of Thumb
• The Total Money Makeover Review
• Prosperity 4 Kids Product Review

I made a somewhat unexpected discovery last night: one of the radio stations near me has begun playing Christmas music.  Not just the occasional song or interesting hymn, mind you, but a constant, non-stop barrage of songs.  In the short time I was listening, I heard holiday songs I’ve never even heard mentioned before.  Seriously, am I the only person who never heard Dominick the Donkey before?

Now don’t get me wrong, I like Christmas music as much as the next festive minded Christian, but there’s a time and place for everything.  If you can’t wait until after Thanksgiving to unleash the full force of Christmas songs, I think there’s something wrong with the world.  To make things worse, I believe this same station was just asking people to go online to tell them when to begin playing Christmas songs.  Which means there is at least a slim majority of their listeners (or the portion of their listeners willing to express their opinions online) who WANTED Christmas music 24/7 to start in the middle of November.  I’m a little horrified at the thought.

Alright, enough of my yammering about Christmas music; it’s time to get down to the nitty gritty of net worth.

Not a terribly pretty picture; some Christmas spending (yes, even though I complain about Christmas music, I’ll still shop for Christmas presents whenever I can) and paying of various bills ate up quite a lot of my reserves, and without a regular salary, it’s been a rough weekly.  Hopefully, next week will be more fruitful and productive.

• Calculating Your Net Worth
• Net Worth Update - July 2007
• Reasons Why it is More Fun and Logical to Monitor Net Worth not Credit Scores
• Reviewing My Net Worth
• A Brief Net Worth Update

So far this week, we’ve covered a variety of ways to invest, from target date funds to actively managed mutual funds.  But through all these methods, you may have noticed one common trait: you haven’t been completely in control.  You’ve been relying on indexes or professional investors to choose your investments for you.  But what if you, like Delilah, want to take the reins on your own finances?

“I LOVE investing!  I like to do research, educate myself, and study financial literature.  But it seems like so many places just want me to invest in mutual funds, and index funds at that.  What can I do to take control of my investing?”

Well, Delilah, you’re in luck, because today is all about do it yourself style investments.  Let’s start with most commonly cited type of individual investment…

Stocks

Before we get started with investing in individual stocks, let’s go through the standard warning: stocks are risky.  Unlike mutual funds that invest in tens, hundreds, or even thousands of companies, stock from a particular company is tied to the good (or bad) fortunes of that company.  Even if the industry as a whole is doing well, even if the economy is doing fine, problems with the company could cause it to go bankrupt, leaving your stock worthless.

As a result, when investing in individual stocks, you’ll need to keep a few things in mind when stock investing.  First, diversification is a must; no matter how much you believe in a particular company, putting all your eggs in their basket is just foolish.  Be willing to invest in several companies (five to ten, at minimum) to ensure that problems in one aren’t enough to completely sink your fortunes.  Second, be willing to do plenty of research if you are holding individual stocks.  No less an authority than Jim Cramer recommends one hour per stock per week; if you can’t (or won’t) devote that much time to researching your holdings, it’s better to stick with mutual funds in your portfolio.  Third, chances are that you won’t be able to get stocks to fill your entire portfolio; even if you can find enough domestic stocks to fill your needs, there are still foreign holdings to consider (to say nothing of bonds).  Even if you invest in individual stocks, keeping some mutual funds in your portfolio to fill the holes is a good idea.

Alright, enough of the warnings and cautions.  The most common way to invest in stocks (rather than trading, which falls more into the realm of speculation) is to buy in small amounts regularly, slowly building up your holdings.  This is the standard ‘buy and hold’ approach, where you buy a stock with the intention of holding it, potentially forever.  In this approach, be sure to carefully research the stock.  There are plenty of resources available to you to research potential stocks in which to invest (did I mention my fondness for Morningstar yet?).  Be sure to adjust your asset allocation to reflect the added stocks (you don’t want to be overweighed in a particular area should a bubble burst on you).

Follow these tips, and you should be able to add individual stocks to your asset allocation without a problem.  Good luck, and rock on would-be investor!

• How Do Bond Mutual Funds Work?
• Weakon 314: Venture Capital and Angel Investing
• The Most Area To Invest Your Money
• So, where do you keep YOUR money?
• Is This the Right Time To Invest In Small Cap Funds?