Planning

Personal Finance Interview with Lazy of LazyManandMoney.com

Name: Lazy Man
Age: 30
Net worth Range: 165,000-170,000 (see Lazy Man and Money for current figures)
Title: Senior Software Engineer (the senior is a bit of stretch)
Websites: Lazy Man and Money & Lazy Man and Health


Current Financial Strategy:

Do not spend more than you make… Max out 401(k)s and Roth IRAs… Use credit cards for reward points, but pay them off completely every month… Don’t buy a home in overpriced markets where rent is reasonable (like Silicon Valley)… Use a HELOC (like my old home back in Boston) instead of an emergency fund so that money can work for you… diversify any money in the stock market along growth, value, small caps, large caps, international, and 2-3 of your favorite sectors using ETFs or mutual funds with low expense ratios such as Vanguard’s… Diversify your income streams – don’t depend on your main job for all your income… I currently put money into Prosper.com where I believe I can get a 13-14% risk-adjusted return year over year, but I wouldn’t recommend it for a novice.

Best Financial Tip:

Subscribe to Lazy Man and Money’s RSS feed. Oh you want a a real tip? Buy razor blades in bulk on Ebay. I don’t believe in one-size-fits-all advice, except for generalities that are more or less common sense like “Do not spend more than you make…”


Worst Financial Move Ever:

Buying technology stocks in 2000.

Financially, I need help with:

Not being overly frugal and a tightwad with money. It’s hard for me to enjoy a nice dinner out without thinking that it could be a month’s worth (or more) of very good dinners at home.


What personal finance tools do you currently use to track and manage your money?

Excel and online bank accounts. I don’t have a budget like most personal finance gurus would suggest. I simply ask myself if I really need to spend my money in this way and how is that purchase going to pay off for me.

What are the problems in your personal finance tools?

Excel isn’t as portable as the web. I can’t access some of my finances on the road.

How would your ideal personal finance tool work?

I haven’t put a lot of thought behind this, but if I did, I could probably come up with a whole suite of ideas. I’d stress simplicity and having a very, very basic application with just a couple of features with it. Secondly, if the financial tool is web-based, it should stress privacy at all levels. One thing I’d love to see is a way for a customer to destructively destroy all the data collected on all the servers of the financial tool. An well-respected auditor would perform an annual audit to give customers the assurance that the data is gone.

What more do you want to know about your personal finances?

Budgeting is really difficult for me. I’ve tried to use Quicken and one of two things always happens 1) It always gets out of date on me. This happens because I don’t think to load it and update it. And when I do think about it, it’s not convenient with all the memory it takes to run. 2) I set up an automated deposit (like my pay check) to get the taxes and everything right and, since I have direct deposit, my bank records the same amount for the same day, giving me duplicate transactions.

How much do you think you currently spend on eating out?

I’d guess about $250 a month, but it varies quite a bit. Some months it will be just three trips to Taco Bell and other months it will be a special occasion for me and my fiancee to celebrate.

How often do you want to know about your personal finances?

I want to know about my personal finances as often as I want to :-) . Some months, I may want to know about them 25 times, and other months (when I’ve got more going on), I’d like to know about them less often. I’m probably not the typical person because I write about such issues. I think the average person would be best spending an hour each month to examine his/her finances. He/she should also spend 2-3 hours quarterly for a more in-depth review. Finally he/she should spend 8-10 hours yearly to set goals and review the last year.