This is long and ranty. I haven’t done long and ranty for a while. Take it or leave it.

It was one of those “blinding light” moments – the moment when you finally turn to acknowledge the feeling that’s been kicking around for many months and realise “oh yeah!”

I finally discovered that I really hate Facebook.

It’s not like I’m the first – the most famous incidence being Jason Calcanis’s decision to declare “Facebook Bankruptcy” back in July, an event which trickled by without actively triggering my own epiphany. My realisation was prompted by a conversation with someone who recently heard a talk by a Facebook developer. The salient point, from the horse’s mouth, was that Facebook believe that their application is compellingly relevant to its users “because everyone you add on Facebook is someone you want to hear from.”

Evidently no-one on Facebook staff is being bombarded with the constant “Zombie requests”, Quiz requests, “rate your movies” requests and other effluvia which, post-trumpeted-API-launch, have become a veritable Face-tsunami. Furthermore, no-one at Facebook seems to know anything about psychology, social networks or the interaction between the two.

There are two major problems with the “all your Facebook friends are relevant to you” hypothesis.

Firstly, social networks tend to morph under the weight of human psychology into a Pokemon-like popularity contest – “gotta catch ‘em all” – you add everyone you’ve ever so much as exchanged glances with, and anyone with less than 50 friends looks like a lonely loser.

Secondly, it’s very hard to deny friend requests since it’s obvious that you’ve done so and it’s a pretty blunt snub. Even if you don’t care much about the latest “addee” in your stream, few people want to be seen by their former schoolfriends as an unfriendly snob, and even fewer people want to upset a professional contact who may be a key ally at some point in the future…

…which is why everyone’s contact list balloons over time – for many months I had only 8 contacts on Facebook; by the time of last night’s revelation, that had grown to 125. There are only three possible answers to this -

1. Bite the bullet, and reconcile yourself to the idea of coming across as an asshole.
2. Add people until your “Feed” looks like a cross between Toys’R'Us and a warzone.
3. Get the hell out of Dodge (my current preferred solution).

I’m periodically fascinated by how people view online life, and the differences in the boundaries that they set (or perceive) on the internet, versus that “other” life with the blue ceiling and the third dimension.

My curiosity was piqued again this weekend when one of my posts here attracted a totally unrelated comment asking a Flickr support question.

I’m astounded that someone managed to take a path from my recent occasional stints helping out on Flickr’s support forum, all the way to this place which (save for occasional posts where my personal interests or life experiences overlap with work) is totally unrelated to my place of employment.

I can very well imagine the route they took – they saw my posts on the forum, followed them to my profile, and followed the link from there to here before posting. But…

This is the ninth (and final) part of a series on setting up a financial plan.
The beginning of the series is here.
The previous article is “Financial Tools: Budget Tracking/Planning“.

So here we are, all set up with the right tools to build a better financial future. Hooray! But now that the initial hard work is (mostly) over, it’s time to step back for a moment and get some perspective.

All the plans, account setups, expense reductions and general thinking about money I’ve done in the past few months has changed a lot of my perspectives.

I don’t walk into a store and blindly buy things I want right now any more, because every dollar I spend is a dollar that could be working for me elsewhere. And I’m truly grateful for the change, because it will have a marked positive effect in the future.

But like all new interests, obsessions and endeavours, it’s easy to get carried away and become single-minded about them – checking spreadsheets every 30 minutes, and vowing never to spend a red cent on anything ever again – because it could be invested.

Being obsessed has been good for a few months – I’ve put in a lot of spadework and made a lot of decisions which set me on the right path. But now it’s time to let those decisions and tools work for themselves, and think a bit more philosophically about how my life and my finances mesh together.

For me, the quintessential point to base this thinking around is my snowboard.

This is the eighth part of a series on setting up a financial plan.
The beginning of the series is here.
The previous article is “Financial Tools: Net Worth Planner/Tracker“.
The next (final) article is “Finance: A Little Perspective (and some snow)“.

One final financial tool that I’m finding invaluable – a budget tracker.

One of the things I’ve realised over the last couple of months is that I’ve often spent money without really taking note of where it’s going. This was most apparent when I was trying to estimate my weekly expenditure for my Net Worth Planner. I knew pretty much what I spend, but I had no detailed idea of what on.

The only way to find out was to start detailing my spending down to the last cent, in a way which allows me to review it, and trim any unnecessary outlays. You could do this with a spreadsheet, but that quickly became cumbersome, so I turned to dedicated software for the task.

This is the seventh part of a series on setting up a financial plan.
The beginning of the series is here.
The previous article is “5 Accounts, #5 – 401(k)“.
The next article is “Financial Tools: Budget Tracking/Planning“.

Apologies for the slight hiatus – one day I’ll find the “sweet spot” combination of lifestyle, organisation and motivation to write on a regular schedule. Until then… sporadicity rules…

Last time I posted on personal finance, we wrapped up my summary of the 5 types of account I think I’m going to need for my nascent plan.

With that done, it’s time to look at the tools we’ll need to build and execute that plan.

Today, it’s the turn of the Net Worth Tracker and Planner.

What’s a Net Worth Tracker?

Put simply, a Net Worth Tracker is a spreadsheet, website or application that you can use to track your Net Worth. I like to think of it (somewhat macabrely) as the sum total your beneficiaries would get if you accidentally fell off a cliff tomorrow.

Your “Net Worth” includes every major financial balance in your life – the value of any cars, the equity you have in any homes, the sums of your retirement accounts, savings, checking accounts, wallet, investments and so on; as well as your debts – credit cards, loans, mortgages, etc.

A Net Worth Tracker is an invaluable tool in getting a better grip on your finances because it’s a (maybe sunny, maybe brutal) “quick sweep” overview of your current financial health, and a great way, by filling it in week-to-week (or month-to-month) of reviewing progress towards your financial goals, or seeing the effects of missteps.

Bit quiet on the posting front this week – mainly due to my traveling around Asia for the second leg of the “24 hours of Flickr”/International promotion tour.

I’m trying to keep photos up to date on Flickr – the Collection will give you a good overview of the weird and wonderful experiences we’re having out here.

In the past week, I’ve…

• …attended 2 Flickr launch parties.
• …given a talk to Korean developers.
• …luxuriated in the second best hotel room I’ve ever stayed in.
• …been to a Crazy Bar.
• …visited to the Korean DMZ
• …frequented a bar where all the waiters are dwarves… with a guy who’s dwarf-phobic.
• …eaten Balut.

A quick bit of site update news – I’ve added a Talks page in the uber-optimistic hope that I’ll be giving more presentations on Flickr, Internationalisation and related topics in the near future. For now, it just contains one set of slides from the Korean talk, notable for the fact that the lovely folks at Yahoo! Korea translated all the text into Korean, to make things easier for those developers who didn’t have perfect English.

The talks page is here:

http://hitherto.net/talks/

Now, if you’ll excuse me, I have to fly to Kuala Lumpur…

This is not a new observation, but it’s something which just popped back onto my radar, sitting as I am in a hotel in Seoul, Korea.

Google really did introduce a horrible flaw when they first internationalised their site; one which hasn’t been corrected to this day.

The flaw is simple: they assume (seemingly by IP detection and nothing else) that the country you’re in is the language you speak, and that you will get a site localised in that language for as long as you’re surfing the web from there.

Whilst only mildly annoying when in, say, France, this is utterly disastrous for most western travelers to places like Korea, because we have no idea what the page is saying. Even worse, there’s no obvious way to navigate back to the English site, barring a small link on the site homepage (which you won’t see if you’re visiting the results page from a browser plugin; and is still bloody useless if you’re, say, German).

It’s always interesting when a company like Google – feted for their flawless execution, makes a schoolboy error like this, because it tends to reveal interesting things about that company’s culture.

This is the sixth part of a series on setting up a financial plan.
The beginning of the series is here.
The previous article is “5 Accounts, #4 – Investment“.
The next article is “Financial Tools: Net Worth Tracker/Planner“.

Many times, I’ve heard that “401(k) is free money – you’re mad not to take it!” without really understanding what that meant. After all, a “retirement account” is money that you’re not going to see for 30-50 years… bo-ring. One day, though, you’ll want to retire, and doing so requires a significant investment socked away (current estimates hover around the $1m – $1.5m for true retirement comfort). What does a 401(k) plan get you?

Most plans have some form of employer-matching, so, to take a conservative example (my own company is actually more generous), a 15% employer match means that every dollar you put into your 401(k) immediately becomes $1.15. That means that, even if your 401(k) does nothing at all, you’ve already made a 15% return on your investment on day one. In addition, 401(k) deductions are pre-tax, so a contribution of $500/month works out to appear as a much smaller “dent” in your paychecks (somewhere around $360, depending on your tax situation).

In reality, even a fairly conservative 401(k) portfolio should make 8.5% per year, on average (we’re thinking long-term – 30 years or more here, so individual market ups-and-downs should even out to a good growth rate). This means that in just a year of $500/month contributions, with an employer-match of 10%, your $6000 pre-tax contribution (about $4300 in wages you’re no longer seeing) should be worth in the region of $7150. And the real beauty of this is that the interest you earn is compounded, so as the “capital” in the account grows, every cent is re-invested to begin earning its own percentage gains.

This is the fourth part of a series on setting up a financial plan.
The beginning of the series is here.
The previous article is “5 Accounts, #2 – Online Savings”.
The next article is “5 Accounts, #4 – Investment“.

I think everyone instinctively knows that they should have an emergency fund, but like many other pieces of financial advice and/or common sense, it often gets put off or bypassed. The cause is the same as that of most common financial missteps – the fact that our brains simply aren’t wired to think sensibly about the future – why plan for a financial disaster which may never come, when we can live right now?

There are too many things which might require an immediate financial “bridge” – major car problems (if you commute by car), a sudden medical expense, an unexpected layoff… if any of these things “catch you short” you could be seriously stuck, forced to rely on a credit card or a loan to get by, at which point you end up in a fresh new financial hole full of unwanted interest payments.

So if keeping an “emergency fund” on hand is a good idea, what’s the best way to go about it?

Since this is for emergencies, it needs to be accessible in short order, so we want something like a savings account or a money market account which will allow us to withdraw/transfer money immediately. So why not use our online savings account?

There are two needs an online savings account doesn’t quite meet.

1. We want this money to stay “saved” – mixing it in with all the current account sweeping and discretionary considerations muddies the water, and tempts us to spend “emergency” money on non-emergencies.
2. We should be keeping this money around, unused, for the long term. So we need as good an interest rate as we can get, to protect our money from inflation.

A good alternative is an online-accessible money market or high-interest savings account.

This is the third part of a series on setting up a financial plan.
The beginning of the series is here.
The previous article is “5 Accounts, #1 – Checking“.
The next article is “5 Accounts, #3 – Online Savings“.

Last time, we looked at the checking account, and paring it down so that you’re not storing unnecessary money in there. There’s another very good reason for doing this which I didn’t touch on in the last post – practicing frugality.

With only the money needed for your “day to day living” sitting in your checking account, any sudden impulsive purchases have to be planned for. You can’t wander out to the stores and drop $350 on a “spur of the moment” xbox 360 purchase, because the money isn’t available to your debit card (and if you’re seriously impulsive, you’re sensible enough not to carry a credit card around all the time, right?)

Expensive purchases suddenly have to be thought through, weighed against your other financial priorities and then “budgeted” – before you splurge on plane tickets or games consoles, you’ll need to move that money back into your checking account especially.

This is where an online savings account comes in.