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Monday, March 27, 2006

The importance of statistics

Did you know that your odds of winning the PowerBall lottery is 63.1 billion times that of picking the perfect NCAA basketball bracket? (63,127,100,745.234:1 to be exact, Thanks bill.)

The WSJ has an interesting article about what the odds are of picking the elusive perfect bracket, taking into account different methods of predicting winners.

However, the real reason why I bring up the article is because Carl Bialik's column presents an educational look at the importance of understanding statistics. Read through his biweekly articles and you will quickly be able to get a grasp of how statistics can be used to lie and manipulate the facts.

So, if you have some free time and want to educate yourself on how to see through erroneous statistics, I suggest reading through his articles. The best one to start off with is this article here, where he gives examples of how even journalists (and we trust them to bring us the news) can't or don't know how to use statistics and numbers properly.

I'm off to london this week, so it might be a while before I update next.

Monday, March 13, 2006

Why I don't update often.

I try not to post quick links to articles, deals, etc as that is a waste of my time. I also don't post my monthly networth or intimate financial details. There are plenty of sites out there already that do that. This blog isn't about generating traffic (and subsequently more ad clicks). This blog isn't my second job or income like some others. I am not trying to monetize my readership, however patheticly small that is :P

My goal for this blog is to present to you a unique perspective and analysis on personal finance that you won't find elsewhere. Sometimes I post and point out how other bloggers are wrong. Other times I try to probe deeper and analyze an article or idea that I found interesting. I also sometimes try to share some personal tips and methods that I've figured out. The idea is that my posts should be more unique and thoughtful than simple "ING rates went up, click here." posts that you often see elsewhere.

Therefore, to get updates for when I post, I suggest you subcribe to my RSS feed here. Upcoming posts will include the 2nd part of my article on tax rates around the world and a post about the CFA program (I am currently studying for level 2), along with my usual ramblings. I also have some books to review, but the priority on those are low.

EDIT: I forgot to mention that the only thing that I really do update often is the restaurant.com coupon code on the right side bar. I use restaurant.com a lot and I just check my blog for the latest code. If you're not familiar, please read this post.

Feel free to email me if you have any suggestions for this blog!

Saturday, March 04, 2006

STOP OVER SAVING!

I want to direct you guys to this post by Kirby over at Kirby on Finance. He makes some great observations about striking a balance between saving and spending.

It seems to me that most personal finance blogs advocate lots of saving and frugality, and ultimately building networth. The whole point seems to be to reach some magic number by some arbitrary age, where one can then finally start living life to its fullest.

I'd just like to advise caution on that mentality. Life is in the present. I spent over $1000 on dining last month (mostly due to one meal at per se), and only managed to save a little. While I understand that that meal, had I invested it at a rate of x%, for x years (blah blah), would have become a ridiculous amount of money, I have no problem with it. In fact I think that meal was worth every dollar; I'll remember that meal for years to come.

Ultimately, it's about balance. You are trading present enjoyment for POSSIBLE future enjoyment by saving. Just something to consider while you put away money into your savings account.

EDIT: I hope no one gets the idea that I am suggesting you spend beyond your means. The balance that I am talking about is a balance between saving and spending. In no way does that mean NOT saving.