May: Books I've Read

I have been a pretty bad reader these past few weeks, which I can admit, despite making it my goal month after month. What I did get to this month was:

The Lexus and the Olive Tree by Thomas Friedman.
Extremely interesting read as a snapshot in time; it was published in 2000 – before 9/11, long before all of our current troubles, endless wars in the Middle East, et cetera. The focus of the book is globalization as the new (post-Cold War) era. Even the constant reference to the Cold War as an anchoring point has a confused disarming quality. This was a long book with lots of stories and I can admit to a bit of skimming. The foundational analogy: the lexus = economic development and the olive tree = lingering nationalism and heritage. All of Friedman’s stories point to the inevitability and the new permanence of these two competing forces. As such, it gets a bit repetitive, but two novel (to me) things that I took from this slightly dated book were:

The Golden Arches theory of Conflict Prevention – This being the idea that no two countries who have a McDonald’s have ever fought a war after getting the McDonalds, i.e. democracies and/or countries with potential for greater economic development do not like to fight wars; they prefer to stand in line for burgers. My google search, “Is the Golden Arches Theory of Conflict Prevention still true?” produced a Wikipedia article citing exceptions with Georgia and Russia (invasion earlier last year) and ongoing skirmishes between India and Pakistan over the Kashmir region. Regardless, I think the overall concept reinforced my understanding that to some extent it’s not about political posturing or aid – it’s about economic development, and hope for people to generate posterity after poverty. It isn’t even all about policy, although I think that’s probably an inextricable part of the economic development piece.

The other key truth that I retained after reading is the idea that economic development isn’t enough – it just isn’t enough to flourish in the new global world. I am paraphrasing my big takeaway quote from memory: “It isn’t enough to be right about the two economic imperatives of globalization and free trade.” These two realities and values do not preclude the aspects of government that is good, the stabilizing forces of society that protect us and give us a safety net from misery. Something to remember even as Obama’s administration is criticized for the typical big government arguments.

In addition to this one actual book, I have also been reading quite a few good articles (my favorite treadmill reading). I’ve been catching up on several back issues of Vanity Fair articles, for one… latest on Bernie Madoff, the new Tarantino movie, profiles of Heirs and Heiresses, quite an homage to Ted Kennedy. And, have also been reading articles from top consulting firms as posted on their websites. As I’ve been researching potential career options for business school, reading about a consulting firm’s expertise and ideas in a particular industry has been interesting fodder to help me think about how I might approach similar problems and like working on them in that context.

Next up is Thomas Friedman’s The World is Flat, Reagan’s America (Wills), and The Remains of the Day (Ishiguro). Can't wait til I'm out of work and can actually get more reading in :)

Planning for August

August is looming. The one month I will be without income prior to having student loan money come rushing in. Whew, makes you really feel the importance of a liquid emergency fund.

The advice that everyone has given is to arrange and organize your life so that you will have the lowest possible fixed expenses in the months you’re unemployed. Once I get out to California, I am sure things will inevitably readjust to a steady norm, but for that interim phase where I’m just a gal without a job, I’ve decided to plan things out pretty meticulously.

+ Changed my work 401(k) Contribution from 6% to 1%, which will give me another $258 each month (additional $517-$646 total depending on how many paychecks the change is included for)
+ Contact Financial Adviser to suspend Roth and NW Mutual Life Insurance monthly contributions ($450 deduction total beginning in August)
+ Suspend all other savings. ($250-295)
TOTAL: $1217 – $1391 swing in my usual income/expenses, which along with a bit of a cushion from the guy, should be enough to preserve my sanity until I get the loans set up

While I don’t feel great about reducing retirement contributions, I feel fine about it when I put it in perspective. I’ve been contributing a large percentage of my savings to retirement thus far, and it’s just nutty to take on additional debt to maintain my same level of savings. More than anything I think this will help calm me down and prevent me from developing a stomach ulcer. Regaining perspective and control of a messy situation is sort of what this is all about.

Happy Memorial Day Weekend

My best friend is visiting me from SF this weekend! Woohoo! Will report back on the spending recap.

Loan Research - Check, School Info - Eagerly Awaiting

By now I have done a lot of great research on available and highest-rated loans, and I think I have narrowed to a few lead options: the Discover Private Loans, NorthStar Total Education Higher Loan and the WellsFargo Grad Loan. From all the research I’ve done, it seems like I might be able to get approved for a loan fairly quickly, barring any unforeseen circumstances. But the one unknown is any preferred process or protocol from my school. Problem is, they don’t even release all of their financial aid forms and information until August 1st. So I suppose I am in a wait and see, poised and ready to go phase until then.

On a side note, does anyone have other details/background on the loan institutions I prioritized?

Incomus Minimus Breakdownus Maximus

Sorry I have been absentee these last few weeks, but a LOT has been going on:

+ I officially said “No thanks, you can keep your $100K in tuition money” to my employer, thereby relinquishing myself from the three-year post-MBA time commitment I would’ve had to fulfill, and pretty much banishing myself from the grand virtual halls of personal finance bloggers.
+ My brother graduated from college and immediately re-enrolled in a Master’s program for Accounting. As part of his graduation gift, I sent him a little 10-page handwritten tutorial on personal finance principles and ideas
+ I finished up a class at a local community college and officially completed all of my pre-matriculation studies and requirements in Excel and Calculus. Stanford HAS to let me in now.
+ I recently decided to pursue a certificate in Public Management while I’m at school – with a focus on either Government or Socially Responsible Business. I’m super psyched about the program.
+ Took a budget roadtrip to Wisconsin – two nights, gas for a 15 passenger van, all meals, and a baseball game at Miller Park, all for the grand total of $150 per person. Amazing.

Other than being generally busy-ish, the only thing that’s keeping me from posting and thinking more about my finances? The soon-to-be income-free student reality is beginning to hit me. The mountain of debt I am about to absorb is overwhelming, and while I haven’t questioned the direction I’m heading or the decision I’ve made, the logistical “How am I going to do this?” keeps coming back to me. How will I manage my expenses, when I don’t have any assets or income? How will I organize my loan money so that I have the right amount at the right time, when I need it? I know a budget will be more important than ever – but how will I stick to it when I’m already SO far in the red? And the things I would normally want to write about seem more and more irrelevant – yes, would love to create a new goal to invest in a CD, but can’t even think about that right now. The Future of ETF’s? Who cares when I will barely be able to keep up the Roth.

I think deep down part of my nagging concern is even more esoteric than that… who can ever picture what the next stage of life is going to look like, and feel like? I was just as worried about this whole “real world” thing when I was graduating from college, and now hear I am running my life with complete measured control. I still remember the small rush of paying my own bills, taking care of my own oil changes and meal planning and everything else. And soon I will be embracing a whole new set of stages in one: the blur of two years of grad school and the new reality of student loans as one more line item on the Suzy comma Adult dossier.