New Worth Update: April

March has been an eventful month in my personal life. Here are the numbers:

Assets		$ Diff	% Diff
Cash	$3,934	$126	3.31%
Stocks	$0	$0	-
Bonds	$0	$0	-
Annuities	$0	$0	-
Retirement	$17,001	$866	5.37%
Home	$191,900	$0	-
Other Real Estate	$0	$0	-
Cars	$16,123	$0	-
Personal Property	$0	$0	-
Other	$0	($151)	-
Total Assets	$228,958	$992	0.44%

Debts		$ Diff	% Diff
Home Mortgage(s)	$177,272	($187)	-0.11%
Other Mortgage(s)	$0	$0	-
Student Loans	$0	$0	-
Credit Card	$10,918	($70)	-0.64%
Car Loans	$10,365	($351)	-3.28%
Other	$1,566	($58)	-3.57%
Total Debts	$200,121	($666)	-0.33%

Total

$28,837

$1,658

6.10%

There were several notable financial happenings during the past month. On the downside, the market continued its downturn and new retirement contributions of $995 resulted in only $866 in gain. Progress on the credit card front was also hampered by car repairs that left the balances virtually treading water.

Largely because of the uncooperative stock market, we are behind pace to make our net worth 2008 goal. Thus far we have added $4,408 year to date and our target was $6,000. We are currently at 73.4% of our Q1 goal and 18.4% of our full year goal.

On the positive side I celebrated my 25th birthday. We also added to our cash savings so our emergency fund has now broken the $2,000 mark. I feel much better knowing that we have cold hard cash for a rainy day. The plan is to continue the $100 per month emergency fund contributions on the way to saving 3 months worth of cash (or about $11,500).

Overall, In all major categories, assets increase and debts decreased so I think we are finally on the right path. That is all for this month. Onward and upward on our path to wealth.

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Car Insurance: Deductibles & More

Three years ago when I got my BA degree it was time for me to get my car insurance under my own name. For the sake of comfort and simplicity I stayed with the same insurer that my parents have used as long as I've been alive, State Farm. I also kept the exact same coverage my parents had selected.

Now, after gaining a great deal more financial literacy I think it is time to revisit my car insurance. A little research gave me all of the information I need. First we have a 1999 Chevy Lumina (Kelly Blue Book Private Party value $2,880) and a 2007 Dodge Caliber (Kelly Blue Book Private Party value $10,995). Second, I just turned 25 and should now qualify for lower rates. Third, neither my wife or I have ever had an accident that was turned in to our insurance company.

Our current coverage has all of the basics such as liability, uninsured motorist, and medical payment coverage. We also carry comprehensive on the Caliber (required because of the car loan). Under no circumstances would I recommend skipping any of these coverages, and generally I would buy the highest payout offered.

We also have a few extras like towing and trip interruption coverage. Unfortunately I've goofed up and paid once each for a locksmith and a tow because I didn't realize I had these coverages. We also have roadside assistance for both cars, the Lumina is $3 a month through State Farm, and the Caliber is covered under the manufacturer's warranty. I'm undecided about paying for these coverages. Why should I insure against a risk that will cost somewhere in the range of $50-250. I should be able to pay that out of pocket (aka emergency fund) if it is needed.

The last thing that I learned is that I have very low deductibles. In fact, for the comprehensive I have ZERO deductible and for collision I have the lowest available, $250. When I was first starting out in the "real world" it made more sense to have these low deductibles. I didn't have any savings and even a small problem would hurt my cash situation badly. Now, I basically self insure by having $1,000+ in an online savings account. The math tells me that I should raise these deductibles to at least $500 but maybe even $1,000.

By raising my deductibles and dropping "extra" coverage (which I accidentally paid out of pocket twice already), I would save money on my regular payments. I also learned that by being billed monthly I pay a few dollars extra as a processing fee. In total I can reduce my monthly car insurance bill from $137.00 down to $738.00 twice annually. A $14 a month savings isn't much, but over time (and with a little luck on the road) it could add up.

I haven't decided for sure to make the changes. Reducing the monthly bill about 10% but in exchange doubling my risk exposure still isn't clear cut to me. So, now I am looking for comments and advice about what to do. When I make a decisions Aspire 2 Wealth subscribers will be the first to know. Also, let this post be a reminder for everyone else to take a few minutes and double check your insurance coverage.

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What Are We Proud Of?

I heard someone on the radio today talking about Americans and what makes them proud.  That is a funny little word that has a tendency to have deep emotional and moral connections.  Another way to look at pride is one of its opposites, shame.  Both pride and shame have important applications to personal finance that I'd like to consider.

First, what about your money situation are you ashamed of?  Debt is something that makes many people ashamed.  But, not all debt!  The debt that you are ashamed of comes from those purchases that you know deep down you never should have made, or the times you splurged when there really wasn't any money to splurge.  I know that right now I am ashamed that I have about $10,000 in credit card debt.  How do I know I'm ashamed?  Because I've told "white lies" or understated the amount debt I have when talking about the issue.  I know that if I'm willing to lie about something it really means that I'm ashamed of it.

I am also ashamed that I do so little to help strangers or those in need.  Since leaving High School I have rarely volunteered my time for others.  I do not donate to political campaigns even though I care deeply about certain issues.  I do not give to the homeless or the hungry.  I see the importance of giving but have not made it a part of my budget.

I am sometimes ashamed that I do not save more or pay down my debt faster.  From my gross income I save 12.9% plus an additional 5% in 401(k) matching.  I know that there are many people out there that save more than twice as much as I do on a similar income, but I enjoy my lifestyle and don't want to sacrifice anymore.

I recognize that the thing that make me ashamed are weaknesses where I can improve.  Rather than beat myself up I made a plan to address these issues.  I am making steady progress toward getting completely out of non-mortgage debt and will be done by July 1, 2010.  I plan to give a significant portion of my estate, should I be lucky enough to have one, to charity when I die.  I also have plan to gradually increase my savings to 20% of my gross over the next few years.  I am not perfect, but I've realized areas I need improvement and set to work on it.

Now, what about your money situations are you proud of?  I am also very proud of many of my accomplishments.  I am proud that I pay my own bills and am off my parents dole.  I am proud of my education.  I am proud of my job.  I am proud that I own my own home.  I am proud that I have made great progress saving $17,000 in my retirement accounts by my 25th birthday.  I am proud of my wonderful wife and the life we have together.  All of the things I am proud of are the things that I've done right and enriched my life and put me on track to achieve my dreams. 

The things we are proud of can help you set goals for the future.  You want to continue to excel in the areas where you have already had success.  I would like to eventually start a family with my wife, that would make me proud.  I would like to finish a PhD, MBA, or CFP to further my education.  I would like to grow my investments to reach wealth and true financial independence.  I have set goals that relate to many of my proudest money achievements, and new goals will be created as I learn more about what makes me proud.

All of us should stop and take a moment to realize what in our lives makes us proud and gives us shame.  We should embrace what we learn from this exercise and use this knowledge to set goals and improve our personal finances.

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Anecdotes from the Downturn

CNN Money is running a series a short stories from those who are struggling financially.  In total there are 26 articles that cover a diverse mix of Americans.  The common theme is that broad swaths of our population have been hit by hard economic times.  However, all of these stories remind me how important it is to recognize the difference between a collection of anecdotes about individuals economic hardship and statistically important analysis of the whole economy.

After reading through all of the anecdotes, the most common hardships are job loss, health problems, and single parent households.   What struck me is that even in good economic times these problems are very real and likely to hurt the prosperity of ANY household.  As it turns out, unemployment is still at solid levels historically speaking, less than 5%.  A net loss of 63,000 jobs in February may significantly impact individual families, but it has almost no effect on the broader economy.   The past nine months of the credit crunch have not made it any harder to be a single parent or any more likely for health to prevent someone for working. 

There also seems to be a big difference in the outcomes for those who have prepared themselves and those who are oblivious to the basics of personal finance.  Simply having an emergency fund and a college degree can insulate most people from the threat of unemployment.  Those who have a degree are less than half as likely as the general population to become unemployed and with a graduate degree or beyond it is less than a 2% chance of becoming unemployed. Finally, if you have little or no debt, there is almost no risk of having significant hardship during a downturn.  Even part time work can put food on your table as long as you don't have debt payments getting in the way.

Another observation I have made recently is that the media, in all of its forms, is fixated on the bad news rather than the reality of the situation.  By reporting on the misfortune of a tiny subset of the population, it skews our confidence in both the system and our own prospects.  We empathize with those who are struggling and worry that we may be next.  By reporting the monthly job data with a headline of 63,000 Jobs Lost in February rather than Unemployment Remains Virtually Unchanged at Historic Lows a reporter gets more attention but also puts a huge spin on the "news."  While the spin may sell more papers and drum up more readers, it is not a good basis for making financial decisions.

Another observation I made is that not everyone on the series was actually struggling.  One profile is about a middle class family with a self employed bread winner.  They bought a house they could afford with a 30 year fixed mortgage and have taken personal responsibility for their financial future.  Future tax increases are their biggest financial worry.  Another profile covers a couple who are nearing retirement.  They have saved diligently and lived a life within their means.  Their biggest financial concern is not about today, but rather the impact of loose fiscal policy and Wall Street shenanigans which may eat into their buying power.  These people are responsible with their money and are in a position to prosper in the future.  Their worries about politics and economic policy are ones that I share, but because of their good financial choices they are far ahead of the game.  Even in tough times they are likely to have a roof over their heads and food on the table.  It is simply a question of whether they will live "the dream" or "just get by."  That is a good problem to have.

The point of this post is to point out that there are reasons that some people are struggling and others are not, and very little of it has to do with what is found in newspaper headlines.  Rather than worrying about national or global economic conditions we should instead focus on the things we can control: living within our means and making good life choices.  If we do that individually then there is little need for pessimism or doubt about the future.

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Your Brain Makes Building Wealth Hard

One of the first steps to overcoming a challenge is to recognize there is a problem. If you do not know where your stumbling blocks lie it is often impossible to achieve the results you desire. In the wealth building process there are multiple challenges, but one that many people don't recognize is your own brain. Our brains developed to do a great job helping us hunt, gather, and reproduce. Unfortunately our brains are not particularly suited to the challenges of creating wealth.

There is [relatively speaking] a new field of study called Behavioral Finance. The basic idea is that investing decisions are made by people, and people are influenced by psychology in addition to the pure numbers of the markets. In fact, investors (being human) are subject to quarks of neurology, biochemistry, and evolutionary anthropology which in turn influence all of our money decisions.

So, now that we realize that there is more to investing than just the numbers, what does that mean? First off, it means that your brain is not always aligned with your aspiration to build wealth. In many cases your brain can drive you to do the wrong thing with staggering regularity. The best example is the tendency to sell your investments (in panic) during a market downturn.

Everyone knows that to make money a person must "buy low, sell high" but in practice most investors jump on the bandwagon when the market seems to go up, up, up and then sell to stop the pain as the market falls. What is the result? The average investor buys stocks when they have already gone way up and sells after they have dropped. This is a "sell low, buy high" strategy that will loose money every time. Why then do some many people follow this pattern?

The short answer is people "feel" the pain of a loss in the market much more strongly than they "feel" the joy of a gain in the market. Think about this, if you have saved a nest egg of $200,000 which would effect your emotions more, gaining $20,000 or loosing $20,000. The vast majority of people are more emotionally impacted by the loss. In order to stop the pain, they sell the stock. This effect is call Myopic Loss Aversion and has been studied and documented in the majority of people, professionals and amateurs alike.

Behavioral finance relates to several other important ways in which your brain sabotages your finances. It has uncovered important data about why people have such a difficult time saving, budgeting, and investing for the long term. It turns out we are nearly all subject to a Stone Age era inability to evaluate the benefits of long term returns versus instant gratification.

Centuries ago it was much better to have a bird in hand (to eat tonight) than to wait a few weeks or months to be able to eat two birds. If you starved now, doubling your "investment" isn't worth anything (you'd be dead). This is one key reason our instincts fail us when it comes to evaluating market returns. Market bubbles and crashes are another example of psychology creeping into our investing reasoning (and reaping havoc).

In other words, behavioral finance has some impact on nearly all aspects of our financial lives. Now that we know there is a problem, lets do what we can to create wealth for ourselves in spite of our brain.

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March Money Madness

The pinnacle of the college basketball season is upon us, and like many people I have found myself checking stats and picking brackets.  In years past I have put some cash into various betting pools and wagers.  This year I have decided to enter only for fun but I now regret that decision.  Why?  Paying with nothing on the line isn't very much fun at all.

It is my theory, and I'm not psychologist, that the small bets I've made in the past give me a personal stake in the outcome of the games.  If I don't care who wins I don't enjoy watching as much.  Who cares if Butler or South Alabama win in the first round?  I do because I've got $5 on Butler.  Why did I bet on them?  Because I have a cousin that went there.  Does that make logical or mathematical sense, of course not.  It does however make March Madness more fun.

Next question: How much should I spend to add to my b-ball enjoyment these next few weeks?  If history is a determination, I normally enter a couple $5 pools, maybe one $20 pool and then I'd be willing to take a few $10 side bets too.  All told I have never put more than a couple hundred bucks, but usually it is around $50.  I'd say it is enough to make it interesting but not enough to make me go broke.  However, partially because of my new attempt at financial responsibility and partially because of fewer opportunities this year the total is ZERO.  I think the right number is somewhere in between, so more than $0 but less than $100.

Next year I will try to enter one "high dollar" $20 pool to get the endorphins pumping and that's it.  $20 is less than my wife and I spend on a quick dinner out, but it will magnify my overall enjoyment of March Madness several times over.  I will now have a reason to root during Drake vs. Western Kentucky and West Virgina vs. Arizona.  I will celebrate each bucket a little more and bemoan every missed call just that much louder.  Over three weeks of basketball I'll have hours of enjoyment from a very small "investment" in betting pool. 

Who knows, if I win, I might even be able to pay down some a bit more of my bad debt.  Comments and suggestions welcome.  Boo Carolina! 

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Hump Day Round Up

I've continued to look into the inflation problem I raised in my post How High is Inflation Really? I found two good links that dig deeper into rising food costs and rising fuel costs. In general it seems like there have been a whole series of failed policies and broad economic mistakes that have all built up to give us a perfect storm for rampant inflation. It may not be too late to fix some of the problems but there is the potential for very bad things.

On another note, Aspire 2 Wealth has been included in a whole slew of carnivals over the past week. I have gotten behind with sharing them, but today I sat down and read through many of the posts and came across a lot of great information. Here they are:

Money Hacks Carnival #2 hosted by beingfrugal.net
Money Hacks Carnival #4 hosted by Amatureist Financial Journey
Ethics, Values & Personal Finance hosted by Money and Values

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How High is Inflation Really?

If we stop at the gas station to fill up the tank it is obvious that prices have done nothing but go up, up, up these days.  What is even more worrying is that it isn't only fuel costs that have skyrocketed.  Two years ago it would cost about $100 for a trip to the grocery store.  This would provide all of the staples for two weeks.  In a month, the total bill would be about $250.  Lately I am budgeting $300 a month and finding that I consistently go over budget.   It isn't a scientific measure by any means but it feels to me like my buying power has dropped by as much as 25% in two years.  How is that possible?

The official figures for the Producer Price Index, which measures the cost of goods at the wholesale level, rose 0.3% in February and 1.0% in January as reported by Forbes.  Year over year inflation clocked in at a 6.4% rate.  This trend seems to be accelerating to an annual rate in the neighborhood of 7.8% for 2008 based on the most recent readings.  Of course, the policy makers and talking heads bring up that "core" inflation increased at a 2.4% rate year over year.  Core inflation my @$$.  The core inflation rate excludes the cost of food and energy, and be honest, that is completely idiotic.  Exactly what matters to the average person is the cost of FOOD and ENERGY.

Now, what do these inflation numbers mean to you?  It means that if you haven't gotten a 6.4% raise in the last 12 months that you are loosing ground, going backwards, in the earnings game.  Are you in line for a 7.8% raise in 2008?  If not you should start planning now for how you will cut your spending and reduce fixed expenses.  The money won't go as far as it once did and something has got to go.  I feel fortunate, in that it is very likely I will get a raise during 2008 that will be somewhere around 4-5%, but my plan to increase my Roth IRA savings by half that amount (2.5%) may be sidelined in the effort to keep up with rapidly rising prices.   If that is happening to me, I know it is happening to many people all around the country.  We will be the lucky ones; I don't even want to think about how tough it would be to face this inflation on a fixed income.

Another important note is that I have heard a great deal of chatter and online commentary that inflation numbers (which already appear elevated) from the Labor Department are still understating inflation.   I am not prepared or qualified to debate the issue of exactly what the rate may be, but obviously it could be a scary time we do indeed return to double digit inflation as some have suggested.  The bottom line is that inflation has reared its ugly head and if it is 5%, 10%, or 15% it will play a big part in the economic story of the next several years.

Now I want to point out that the media and the government are often wrong about these things as much as they are right.  There is also a component of self fulfilling prophesy whereby the more we talk about high inflation the more it happens.  I don't want to be a Chicken Little and add more fuel to the fire so here is my advice, "prepare for the worst but hope for the best." 

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Overcoming the Fear of Failure

I want to start my own business. In order to diversify my income streams and increase my income I feel that entrepreneurship is by far the best route. The problem I now face is that I am hesitant to risk my savings on an unproven venture. I am afraid to fail. I think that recognizing both my desire to enter the business world and my reservations is a good start, but as someone wise once said, "You can't win if you never play the game."

I spent some time this evening scouring the net looking for advice. Here is some of what I've found:

• Biz Thoughts: Don't Be Afraid to Fail
• National Federation of Small Business
• Practical Commerce: Four Things You Should Know

Because I went out looking for motivational and inspirational resources that is mostly what I've found. One common theme I have found is to start small. By moving slowly and making a limited investment you can gauge the market without large risks. Next, many people advise that what I consider failure, a business that does not proser and make money, is not actually failure. That seems silly, but learning from mistakes is a common theme too.

"No man ever achieved worthwhile success who did not, at one time or other, find himself with at least one foot hanging well over the brink of failure."

It was also pointed out that bankruptcy isn't that bad. I've traditionally been brought up to completely disagree with this statement. My parents have may encouraged me to learn chess or ride a bike through trial and error, but failing to pay back debt was certainly not something that was acceptable; thus, business by trial and error would have been out of the question. A willingness to follow my entrepreneurial spirit because of, rather than in spite of, bankruptcy is a totally new concept for me, but it is endorsed by the entrepreneurship articles I read.

In the end I have been encouraged to push forward with my plans to enter the business world. I will take the advice of other bloggers and business people and start small in an industry where I already have some experience. I'll put off my grand plans for real estate development and focus more on free lance coding and web based business. I'll try to grow Aspire 2 Wealth and keep the readers informed as I test out my business chops and grow my wealth.

Comments and suggestions are welcomed. Please subscribe to my RSS feed if you like what you've read. Till next time, thanks for reading.

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I Missed Out on a 517% Single Day Return

Yesterday I wrote about the Bear Stearns buyout announcement.  Had I been able to put in my options trade for BSC last night it would have worked out to a fat 517% return in mere seconds at the opening bell this morning.  As predicted the stock fell from $30 a share to $3.20 per share.  The March 19th puts with a $25 strike price went from $4.10 up to $21.20 in a matter of seconds at the open.  If I put in my order overnight I may not have gotten my trade done at the perfect price but I almost certainly would have still tripled my money.  My investment of $4,100 could now be worth $21,200.  I missed this boat this time, but it is still nice to know I made the correct call and would have made out like a bandit if I'd had the foresight to get my brokerage account approved for options trades.  Next time I won't be caught ill prepared. 

Please read last night's post to fully understand the how, what, and why of the options investment.  It will explain thing in more detail. 

I'd also briefly like to touch on the shady nature of this whole deal (which of course I was more than happy to try and cash in on).  It has also come to light that there were a number of very suspicious trading trends in BSC and its options in the 7-10 days preceding this announcement.  For example, there was a surge in volume for the $30 strike price March 19th options about a week ago that defies most logic.  The price charged from $0.65 to $3.25 and then to $4.10 in the week leading up to the announcement.  This very odd for an option that is both set to expire this Friday and way out of the money.  People who had caught wind of a potential crash would be the only ones likely to bid up the options to that degree and explain the sizable spike in options volume. 

Look for the SEC to investigate the sweetheart deal JP Morgan is getting ($2 per share is only $0.02 on the dollar based on 4th quarter 2007 equity of $11.7 billion), the potential insider trading, and the possible accounting fraud or mismanagement that led to such a massive destruction of shareholder value.  That's all for now.  Thanks for reading.

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I Am a Perma-Bull

In case you have missed the latest development in business news, Bear Stearns Companies Inc has brokered a deal with JP Morgan Chase to be purchased for $2 per share. At the start of 2008 the stock was trading at $88 per share. This deal is expected to rock the global financial markets and completely crush the stock price of the financial firms. It is likely to be very ugly.

On the flips side of this pain there are two great ways to find profit. First and the method I plan to take advantage of is to continue to invest into the broad market indexes and dollar cost average more money into the market. This route will profit when the market recovers.

The other way to profit from this situation is to delve into more complex investment concepts like options or short sales. I personally tried to buy put options on BSC (Bear Stearns ticker symbol) this evening. Unfortunately my broker requires an additional signature on paper in order to add options trading to my account. With a small investment (and a high level of risk) an outsized profit can be created from large drops like Bear is certain to experience tomorrow.

This post is not intended to a complete primer on options, but briefly a "put" option is the right to sell a security at a given price during a fixed period of time. What that means is that the purchase of a put option is a bet that the price of a security will fall. As of Friday's closing price BVDOE.X is a BSC put option with an exercise price of $25 and March 19th expiration. These options are priced at $4.10. That means to make a profit the stock would need to fall below $20.90 ($25 - $4.10) before March 19th. If the Bear falls to the $3 range I would predict, one $4.10 investment could generate a $17 profit. That is a pretty sweet return for one day, but as the market opens it is almost certain that the cost of the options will skyrocket and remove most of that potential return for everyone but the fastest movers.

I do not endorse this specific investment for all people in all situations! It is important to note that options are a risky business and there is a decent chance that your entire investment can be lost. If the stock does not go below the $25 strike price the entire investment is worth nothing. Also, it is important to note that these prices and estimates are approximate and the product of my personal analysis, be sure to do your own analysis before investing. All of that said, $4,100 invested at Fridays closing price could turn into $17,000 in a single day. Wow!

I'm a bit bummed that the market is likely to tank but it is important to know that there are always ways to make money. Keep investing in the market and in the long run you won't regret your steadfast decision. For more information about these topics I recommend more reading:

Bear Stearns Options at Yahoo Finance
Market Watch News Coverage of BSC
Investopedia Options and Futures Articles

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10 Simple Steps to be a Millionaire

Believe it or not anyone can become a millionaire. Becoming a member of the millionaire club can even be achieved on a very modest income. The trick is to realize that what determines wealth is not how much you make, but instead how much you save and invest. Here is the proof, a New Jersey man while never earning more than $11 an hour became a multimillionaire. There are literally thousands of examples of people who started with nothing and were able to achieve their millionaire dreams.

When I started Aspire 2 Wealth I quickly decided that I would need a plan if I was going to reach my goals. As a part of that plan I wrote down a list of rules or steps that would guide me on my path to wealth. These are ideas that are embodied by millionaires all around us that built their wealth gradually and deliberately over the years. I want to share with you my Millionaire Rules.

Ten Millionaire Rules:

1. Write Down Your Goals
2. Create a Spending Plan / Track Your Progress
3. Learn to Say "No" to Your Wants (and those of others)
   
4. Set Up Automatic Savings
5. Save an Emergency Fund
6. Payoff Debt (except a mortgage or federal student loan)
7. Fund 401(k) to Get the Full Match
8. Fund a Roth IRA to the Limit
   
9. Buy a House and Cars You Can Afford
10. Generate Multiple Income Streams

While implementing all of these rules in your life may not always be easy I can tell you that they are simple. The rules are simple because they are things that anyone, no matter how much income or level of finance education, can understand and apply to their own life. To follow these rules you do not have to clip coupons or live like a monk. It is about making small, practical adjustments to our relationship with money that will allow us to spend less than we make and invest what's left.

Aspire 2 Wealth is all about a shared journey to become wealthy and taking even some of these rules to heart will have a drastic effect on your lifetime wealth. Take some time to read the full article for each rule and decide to put them into practice in your life. It will take years to "get rich" this way but even after only a few months of following my own steps I have started a drastic change in my finances. I have spent less each month and saved more, while still meeting all of my needs and most of my wants. It is worth it. Start Now!

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Dress to Impress

Over the last year and a half I have started traveling for business every couple of months. Usually on these trips I am visiting a contractor which does business for my company. Ultimately my role is to perform an audit or provide oversight into how well they are executing their contractual duties. I have also starting giving briefings to high level managers and decision makers. In other words, at times my job requires me to put forth a professional, credible persona.

A large part of that professionalism is dressing the part. In my normal work environment we don't have a dress code. As an unspoken rule, shorts and sandals are a bit too casual except on special occasions, but day-to-day a tee shirt and blue jeans is perfectly acceptable. I am sometime teased by friends and family because I almost always wear the same thing whether at work or at home: a collared polo-style shirt and blue jeans. When I travel or have a presentation to give that outfit does not give the impression I need to present.

For those situations I currently wear a pair of black slacks, a solid color button-up shirt, and a tie. My entire "dress" wardrobe consists of one pair of dress pants, about four button-up shirts, and less than a half dozen ties. In other words, I can get through a week of business travel and then I am out of fresh options. The problem is that I am finding that in some situations I am still a tad under dressed.

A particular weakness in my current plan is that I know my dress shoes are not up to snuff. I bought them for $30 at WalMart. They are black. They are simple. They also look like I bought them at WalMart... My shoes are clearly due for an upgrade.

Next, in cold weather, or really anytime mother nature is not cooperating, I also look like a schmuck. At issue here is that I only have one real jacket, and it is completely casual. It is a decent jacket for walking around town, but it is more at home on a camping trip than in a board room. Because I am from the South the jacket also is not up to the insane weather conditions I have encountered during my travels this winter (a high temp of -6 is NOT a temperate climate). Thus, I need a better selection of outerwear that is classy and able to stand up to all types of weather.

My last big hole in my professional wardrobe is my briefcase. Again from WalMart for about $30, I bought a messenger bag / soft side brief case. It is made out of nylon and looks more at home on a college campus than by my side during a "power lunch." To top it all off, back in January when I took a trip, the shoulder strap broke as I was walking through the Cincinnati airport. In order to slog through the airport with all of my stuff I really need a bag with a shoulder strap.

A few days ago I was about to buy a new strap for the ailing bag. Then I saw that my options were either pay $18 for a decent padded strap, pay $12 for another crap piece of nylon with plastic hardware and no padding, or worse yet buy a strap of neon green or rainbow color. Rather than throw good money after bad I started looking for a replacement briefcase.

Today I popped into the luggage store at the local mall to see what I could find. I was immediately put off by the $300-400 cases they had filling their shelves. The sales clerk tried to help me out but when I said my price range was $60-100 she just laughed. I was ready to leave but she then told me to feel free to dig through some bags that were behind the counter and lined up below a display case. There I found some treasures. Ultimately I selected a bag that was listed as a Kenneth Cole case new for 2001 (like I care for a classic black briefcase what year it was "in style"), and it had been marked down from $250 to $179 to $139 to $99 and finally down to $79!

I still agonized about the price for a while before I realized that it was just barely more than I paid for my old WalMart bag plus one replacement strap. I decided that it was time to buy a quality product that would hold up for years (it even has a lifetime manufacturer warranty) and project the type of image that is expected of me for important meetings and business travel. This is one of those cases where spending a little money now to make the right impression could pay massive dividends with raises and promotions down the line. Now, if only I can find the same kind of deal on the rest of my professional wardrobe as I did on that case so I will be totally ready to dress to impress.

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