mood: optimistic about the future
currently working on: All the King's Women outline; I have it almost figured out…!
currently reading: Iron Kissed by Patricia Briggs

2008 was long and difficult yet surprisingly interesting and rewarding as well.

On the writing front, the year started off with selling a book to Samhain so that's always fantastic. But the biggest accomplishment is of course signing with an agent. I also left a critique group, but I think in a way it was inevitable. I do miss many of the writers I met there. Oh, and I have a new pretty website. :)

On to the financial matters — my mom lost a ton of money thank to subprime. I wish she'd listened to me when I asked her to sit tight for another year before investing in the funds she was interested in. When you hear about banks raking in record profit from issuing more and more subprime loans, which are by nature very risky, you know there's something fishy going on, and that it's going to fall when weaker real estate markets start to lose their value one by one. I started the year with a ton of debt, but my venture investment paid off right before Christmas, so I'm starting the year with no debt (except the mortgage I have on my house) and some extra cash.

Talk about strange since I never expected to get any payment from the investment, given what's going on in the market.

My writing goals for 2009 are:

1. Complete two manuscripts. I think I figured out what's wrong with All the King's Women and Nine. W00t!
2. Read 52 books. Fiction, non-fiction, it doesn't matter. I just need to read to get more ideas and to recharge. I noticed that I didn't read all that much during the latter half of 2008, and it really affected my creativity.
3. Take time off! I'm absolutely terrible at taking time off and relaxing. I always feel like I have to work or else. Of course this is unsustainable, and I do burn out and can't write for a month or two. Very unproductive. So I'm forcing myself to take two days a week off, along with major holidays, etc. Oh, I'm also making myself go to the gym three times a week at least.
4. Read 2 how-to books (this does not count toward my goal #2) or take two online classes. I already signed up for a January class on how to not sabotage myself. I'm also eying another class on line edits because I think I can benefit from it.
5. Write 2 blog posts a month. I'm terrible at blogging because I just forget at times. So I resolve to do better this year. :)
6. Stop looking for and/or seek crit partners / groups. It's really not that I think I'm too good for feedback, but it takes a lot of time and energy to find a good crit group, and I've decided (after a long and careful consideration) that ROI would be better if I stick with the beta readers I have right now and spend the time I would've used to find good crit groups / partners on reading and taking classes. (BTW — this doesn't mean I don't want any CPs or anything if one happens to come my way, but I just won't be actively looking for them either.)
7. Evaluate and identify all not-helpful-anymore loops, groups, etc. Resign from them by Jan 31. This is a must since I decided that I don't have time for them. I stayed with most of them because you “have to network” but I had to wonder networking isn't about being in a group that sucks up all your time but gives very little in return. I should know better (or else my management consulting professor would send me a stern note saying she taught me better than this).

How about everyone else? How was your 2008 and what are your goals for 2009?

From today's New York Times comes this gem:

…an American Express cardholder whose maximum has been reduced to $1,000 from $1,200 has that much less to spend on clothing or meals out, purchases that lift the economy.

I really hope the New York Times business section gets better writers.

An American Express cardholder whose maximum has been reduced by $200 and thus is unable to spend that amount on clothing or dining out has no business buying clothes or dining out in the first place. An economy floating on debts that people can't pay back can't sustain itself. That's the main reason for the current financial crisis. People in America are generally overextended. That's why when they lose their jobs for even a couple of months, they're unable to pay their bills and fall behind.

It's astounding that some people are still advocating unsustainable consumer spending as the primary means of “fixing” the economy.

The New York Times published an article titled “Given a Shovel, Americans Dig Deeper Into Debt”. I think everyone should read it. It's a sobering look at what happens when you finance your lifestyle with credit cards and other debts.

However, before you read it, I must warn you that the article's author is somewhat…financially illiterate. For example she wrote:

Household debt, including mortgages and credit cards, represents 19 percent of household assets, according to the Fed, compared with 13 percent in 1980.

I hate to say it, but “household debt, including mortgages and credit cards” cannot be called “assets”. They're liabilities. Anything takes cash and/or other assets from you is a liability. And it sucks and must be avoided at all costs.

The article also comes with some videos. They're very sad, but they don't always illustrate exactly what is driving the engine of over-spending and over-consumption. The people featured have absolutely no savings or assets to fall back on. They're living paycheck to paycheck, and they're unable to do anything about it. That's why even a minor disaster can hit them hard and push them into foreclosures and bankruptcies. The absolute tragedy of it all is that it's not uncommon to see people like this in America.

One of the videos features an old lady who didn't save any money because she wanted to give her children better clothes and so on. But she's never given a thought about her financial future. I'm not sure if that was necessarily wise, although I'm sure her children appreciated the lifestyle she's given them.

My parents were the exact opposite. My closet was woefully empty of pretty clothes. I think I had mostly jeans and t-shirts, and to be honest, I hated shopping for clothes because I knew I wouldn't get the kind of stylish clothes my high school friends had. I also owned about four pairs of shoes. But right now, my parents own their home outright (they bought it in 1999) and have some savings to fall back on in case of emergency. They helped me pay for my college education, and with the financial aid and my summer jobs, I graduated without any college loans or credit card debt. They taught me the danger of relying on credit cards, and I wasn't allowed to use mine except for the most extreme emergencies. They also taught me how to balance my check book, how to save and how to manage cash flow. Their mantra still is “hoarding cash or cash-generating assets is the best; borrowing is for the weak-willed”. They think that people who cannot delay gratification or deal with their emotions make poor purchasing decisions and use credit cards to buy non-cash-generating assets (meaning cars, clothes, shoes, handbags, etc.) they cannot afford in the first place.

Although I hated their extreme frugality when I was growing up, now I appreciate the fact that they taught me the value of money. I don't know if I would've been able to survive this long as a non-income generating writer without the financial discipline they'd taught me. And after reading the article, I feel like I'm one of the rarest breed of American women who don't get the therapeutic effect of shopping. I usually find shopping highly stressful because I see it as a cash-flowing-out-of-my-bank-account-and-I-feel-poor event.

How about you? What do you wish you knew about personal finance? Do you have any cool tips and tricks on how to manage money better?