Lilia Beta

Wednesday was my last day of my old job at UC Berkeley. So officially concludes my college days. Thanks to everyone at TSC for the fun times! Here are some photos..

The Parsimonious Days

At school, I think I managed to survive month-to-month on $800, which was more or less the income from my part-time job.

"How?" you ask, "especially in an expensive place such as Berkeley?" Listen up! Here are my tips for living cheaply in college:

1. Do not live in the dorms. Find an apartment with some friends. In the dorms, I was paying something ridiculous like $2000+ a month for sharing a room and eating bland food. Apartments in Berkeley are expensive, but if you find one a few blocks from campus they are cheaper. Also, Berkeley has rent control, so when you find a good apartment, keep it, because you could never get another for the same price next year.

2. Try to control how much you eat out. In college, it's tempting to not want to cook, and go out with friends. You should go out with your friends, but create a budget, and stick to it.

3. Make your own food! On average I spent about $30 a week on groceries. Every few weeks I'd buy staples to stock up on, but most weeks I'd go to Berkeley Bowl for fresh and yummy fruits and veggies. Of course, I didn't eat much meat, but I'd imagine if you're a big meat eater, you really wouldn't spend more than $50 a week. Eating out every day (assuming a rock-bottom cost of $15 a day x 28 days) = $400 a month, versus $200 a month( generous $50/wk x 4) if you buy groceries! Also, fresh grocery food is much healthier.

4. Recognize your "time value of money". Sometimes it's more efficient to eat out, like during finals time, or when you have a job and are really busy. Senior year, I was buying food about 3x a week, because I was working and didn't have as much time to cook. ( Sample calculation: if you make $15/hr, or approx $12 after taxes, it is better to buy a cheap dinner for $8 and save the hour of cooking). Even more efficient, is to buy pre-prepared food from grocery stores ( like those rotisserie chickens that last for 3 days) which will save you time and money.

5. Last and final point- recognize what you really need, I need food, but I don't need to go mall shopping every weekend. I read somewhere that most Americans have enough clothes to live comfortably for 2 years. Ladies, I know this is true for many of you! I bought a lot of clothes my freshman and sophomore year, but cut the habit my junior year. Between then and this summer, I have bought:

- One pair of jeans
- One sweater (which I forgot about and never wore until I found it still in the bag when I moved out)
- One pair of sheepskin boots when Shoe Pavilion went out of business
- Socks and underwear

... and I still had enough clothes to wear, even if I didn't do laundry for 3 weeks!

Which brings me to my next part of my post---

Much Deserved Shopping Trip to the Great Mall!

In celebration, on Thursday, I took myself to the Great Mall in Milpitas for an entire day of bargain shopping. The Great Mall is an outlet mall, and has outlets for stores like Neiman Marcus, Sears, Guess, BCBG, bebe, Abercrombie/Hollister, etc. OH JOY!

To get there, I took BART to Fremont and then a VTA bus. I'd suggest driving, especially if you're going in a group, but I didn't want to get caught in possible rush-hour traffic in an unfamiliar place.

I walked inside the Coach outlet store, and it was being mobbed by hordes of Asian ladies buying armloads of 5-10 bags! HUH? Apparently everything in the store was 50% off, and some of them had a coupon for an additional 20% off (if you signed up and printed the coupon from the Coach mailing list).

Well, one of the items on my list was a new handbag, since my old one (the one I use the most) I had gotten in China 3 years ago, and was little more than a few layers of fabric, with more beads falling off every day. I got this blue patchwork cutie for a total of $114! ( If I had the 20% coupon, it would have been around $90)





Okay, so I usually dislike branded things, because their prices are high only because someone ran expensive marketing campaigns telling us a products will make us look more attractive/skinny/rich/fashionable. I really didn't like the signature Coach bags with "C" written all over (you might as well have "insecure" written all over it instead) . However, I am pleased that Coach decided to offer deep discounts, in light of the rough economy. Louis Vuitton and Chanel (brands that never discount, in order to preserve their "image") take note! I think you could use some mobs of Asian ladies buying 5-10 bags each to boost your profits.

In some ways, my trip is symbolic. Today's entry is titled "The End of Parsimonious Days", because I my poor-student days are over (for now). Now I shall simply be frugal...

Lilia

When I first turned 18, the first thing I did was open my very own savings account at ING Direct. (What did other children do? Buy cigarettes? What are you supposed to do? People don't even smoke much these days...) I was so excited at the 4.5% interest rate I was going to get! An I got more excited when I got emails ever so often about the interest rate increases (usually after the Fed bumped up their rates).

Now I'm 22, and ING's rates have dropped to somewhere around 2-3%, due to to the economy, of course. I've always hoarded my cash in my tiny savings and checking accounts during school because I felt like I was going to spend it all every month- and for the most part I did. I'm out of college and have been thinking about what to do.

Time to try my hand at investments!

Now, I am not, and probably will never be a risk taker. I would have bought treasury certificates if the yield wasn't so horribly low for what a poor college student had to spare. In finance class, we learned that on average, the stock markets well outperforms "risk free" investments in the long run. I am convinced this is true, but in practice was still unwilling to try it.

Recently, I've been reading tons of investment books, and have decided a small amount invested in a few well-diversified mutual funds could help me test the waters. Also, ING has been spamming me with these emails about their new investment service.

I took a look, and was pretty excited! ING's service is called ShareBuilder, and you can buy and sell stocks for only $4, which is really low. Most importantly, they have no load mutual funds (basically meaning there is no fee for buying/ selling since there is no middleman) from some of the top mutual fund companies! I did a little bit of research and found a list of 25 best no-load mutual funds for 2009 from Kiplingers.com. ING offers mutual funds from some of these top companies, including T Rowe Price and Vanguard.

Im pretty excited! My investment plan will be something like:
$300-500 to start, $50-100 added in every month.
I probably won't sell anything, and will just not invest if I feel it is a bad month (which is unlikely)
In at least a year, I may start taking money out, because I need it for school. This way, I avoid the short term capital-gains tax ( I must hold investments for at least a year and a day).

Consider ShareBuilder by ING! If nothing else, possibly losing $500 (with the chance of gaining a lot more) in mutual funds is probably better than two pairs of designer jeans that only get worn out, in my opinion!

Remember, the stock market returns average 15% in the long term : this could be years or even decades! This assumes also that your investments are well diversified- meaning diversity across industry, nationality, and company size, etc.

And a lot of the funds have lost value during this recession. Mutual funds are NOT FDIC insured, so only invest what you think you can afford to lose (or is not better spent elsewhere, like on tuition).


I'll keep you posted as I do more research and decide on what to do!