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Introduction Chapter

Tending Your Money Garden is not a comprehensive text on financial planning. It won't offer hot stock tips or outline cold-hearted investment strategies. Instead, it will offer a simple mixture of practical advice, humor, and helpful analogies.

If you prefer complex and boring personal finance books, please refer to my four volume trilogy, The Quantitative Explication of Pecuniary Maximization Techniques (soon to become a made-for-TV movie retitled "The Alien Abduction of Fluorine, the Naughty Dental Hygienist").

I've tried to avoid using financial jargon, but if you don't understand a word or phrase, please check the glossary. Maybe that term will be there and maybe it won't; glossaries are like that.

Illustrations, charts, and graphs should help you to visualize important concepts. The Workbook Section includes sample forms to help you implement your goals, and the Resources Section lists some books and websites so you can learn more.

I'm a sucker for analogies and metaphors, so I'm warning you that I'll be using them throughout this book. The garden analogy, however, will be used in moderation. This decision saves you from reading the tenuous analogy that would have been on page 34 when I compared selling stock options short with semi-circular raking techniques. I hope this book will become a valuable tool for Tending Your Money Garden.

Pre-Fund Your Dream Vacation

Does it bother you if you have to postpone your next vacation because you are still paying for the fading memories of the last one? This may not be too painful if that was a GREAT vacation, but if your fondest memories of that Caribbean cruise involved Hurricane Mildred, sweet purple rum drinks, and dancing too many Mambos with a swarthy rugby player from Argentina, it's better if the trip is paid for quickly. You probably know where you want to take your next vacation, and you've got a good idea of when it will be, but do you know how much it will cost? Vacations almost always cost more than you anticipate. If you enjoy planning trip details: where to stay, what to wear, and what potency of sunscreen to bring, now is the time to create a budget and start saving. If you can't save enough, explore some options:

  1. Scale down your plans
  2. Save more
  3. Postpone your trip
  4. Decide how far into debt you are willing to go

The example below shows how to reduce your vacation's cost by pre-funding it. The savings may even be enough to pay for a sky diving lesson or an extra day at your favorite posh resort. At the very least, you should be able to afford a few more purple rum drinks, an extra bottle of Dramamine, and some Mambo lessons.

Pre-Funding Your $5,000 Vacation Versus Charging It

Start saving this month. Deposit $405 per month into a special savings account. (6% interest assumed.)

Credit Card Financing
When you return home from your vacation in a year, begin paying $405 a month on the $5,000 balance on your 15% interest card.
When you start your vacation in one year you will have $5000 Your trip won't be paid off for 14 months. Total cost is $5,468.

Extra amount to spend on your vacation = $468

Socially Conscious Investing

Because many people care as much about where their money grows as how rapidly it grows, I'm including a section on "Socially conscious investing." More commonly referred to as "socially responsible investing," this is my professional specialty. The most commonly accepted SCI definition is the active avoidance or "screening out" of companies that make products or conduct business contrary to the investor's ethical beliefs. Some typical avoidance or negative screens that eliminate companies include:

  1. Cigarette, alcohol and gambling industries
  2. Gun and weapon system manufacturers
  3. Repressive regimes and governments (formerly South Africa)
  4. Firms that use foreign sweat shops and child labor
  5. Animal cruelty or animal testing in product research

On a continuum from the worst to the best company, there's an arbitrary line that separates companies you may be comfortable with from those you aren't. To complicate this process, a company that is good in one particular area may be poor in another. Socially conscious investing is not a black and white subject. It's not a choice between Luke Skywalker and Darth Vader. Even Darth, we ultimately discovered, had some redeeming qualities, and Luke not only wore a silly haircut, but we always suspected that he had impure fantasies about Princess Leia.

Bob's Theory: "Money is more than just a commodity to accumulate; it is a resource that provides you with options. In theory, more options mean more freedom."

Bob's Freezer: "One way to avoid impulsive spending is to put your lone credit card in a plastic glass, fill it with water and put it in your freezer. If you have the urge to use it, you must wait until the ice melts. Important note: microwaves may not be used."

Bob's Specialty: Socially Conscious Investing. "I try to ask all investment clients if they wish to avoid certain companies and industries. The vast majority, even those who don't look like they sell hemp hats for a living, tell me that they want to invest in a manner consistent with their social and environmental concerns."

Bob's Fear of Snakes: "To deal with my fear, I always force myself to visit the reptile house when I go to the zoo. My self-imposed therapy has desensitized me so well that I no longer need to watch where I step when I'm in airports and shopping malls."

Bob's Obsession: Diversification. "If you learn nothing else from this book, let it be that you should put your money in a variety of places, and I don't mean Certificates of Deposits at three different banks."

"Grade: B-, only three improperly used semi-colons and two misplaced modifiers, you're improving."

--Bob's former high school English teacher

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