A few nights ago, my wife had to work late, so I was charged with an evening at home alone with my three year old and one year old.

We did the usual things. We ate dinner together (spaghetti – my son’s favorite food). We played with his train set. I read several books, mostly selections based on my daughter’s whims since she’s just discovered the fun of having books read to her.

Eventually, we decided to watch a nature show. The three of us cuddled up on the couch. All three of us were tired – I could have easily nodded off right there. My son leaned in close to me on the right, and my daughter nodded off in the crook of my left arm.

It was easily the best evening I’ve spent in a very long time.

Before my children were born, I used to obsess a lot over the things I could accumulate. I’d buy video games and DVDs and gadgets. I surrounded myself by tons of things – and they were a source of personal pride to me.

At some point, though, I realized something about all of that stuff I had accumulated: I loved it, but it didn’t love me back. It never can and it never will. I can’t build a healthy, happy, mutual relationship with the things I had purchased. All it could really do is rub a bit of salve on an emotional or psychological wound, but at the end of the day, I was left empty.

There is no material item on earth that can compare to being cared for by others – and caring for them, too, in a mutually healthy relationship. The feeling I get when my wife cuddles up next to me in bed just as we’re drifting off to sleep. The happiness I felt when those kids snuggled in with me on the couch. Even simple things, like a nice phone conversation with my mom or a note sent by a close friend.

Realizing this brings about a sea change in how you spend your money. Instead of spending your money on gadgets and cars and other things that serve as a salve on your feelings, you want to instead use your money to protect the ones that you love the most and provide them with happy experiences. Instead of spending my checking account down to the minimum in order to acquire a new gadget or program, you want to keep some in reserve to protect those that you love.

Many single people will read this and assume that I’m talking mostly about married people and people with children. I’m not. Single people without children have opportunities to be involved with as many or more powerful relationships with others than married people or parents do. One of my closest friends spends most of her waking hours working with the mentally handicapped and their families. Another close friend of mine is a hospice volunteer. In both cases, they’ve had the opportunity to build strong relationships with others – and in both cases, the people involved have come to find that accumulating stuff really doesn’t matter that much.

In the end, things cannot love you back. They can’t provide you with the sustaining, loving relationships that we all need. Instead of chasing that sweet new car or that amazing home electronic setup, why not consider shoring up those relationships that bring love into your life? The best first step you can take is getting your own financial house in order – and opening yourself up to those simple moments with the people you care about, like my evening cuddling with my kids on the couch.

Good luck.

We use our crock pot all the time. Rarely does a week go by when we don’t use it at least twice. It enables us to simply put some ingredients in the crock pot in the morning, turn it on “low,” leave it for the day, then enjoy a home-cooked supper with our family at dinner. Often, we’ve got enough food left over that it serves as a solid lunch for me and my wife the next day (or the day after that).

A long time ago, I wrote an “introductory” post about crock pots entitled The Art of the Slow Cooker. In it, I mention the following:

Don’t have any idea what to cook? I’d recommend starting off with one of the spice packets sold in the grocery store, usually near the soup mixes. McCormick’s slow cooker packets are quite good for what you pay for, and the recipes usually involve dumping in the packet and four or five ingredients, turning it on low, and walking away for eight or nine hours. If you need to be away longer than that, add a quarter cup of additional water to the mix.

What’s amazing is how easy it is to create a truly tasty meal with minimal ingredients. Even if you don’t choose to pick up a spice packet at the grocery store, you can still create a wide array of great recipes with just a few ingredients in the crock pot.

In fact, my wife and I often strive to come up with great crock pot meals that require only five ingredients. With such a small list of ingredients, it takes only a minute or so to pull the crock pot out of the cupboard, toss in the ingredients, turn it on “low,” and leave for the day, only to come home to a deliciously prepared home-cooked meal.

Here’s one such recipe from The Art of the Slow Cooker:

here’s the simplest really tasty recipe I know of for a slow cooker.

1 can condensed cream of chicken soup (chicken & herbs if you can find it)
1 small can mushroom pieces (a 4 ounce can, drain off the water first)
1/2 chopped red onion
1 1/2 pounds skinless, boneless chicken breasts (cut into strips if you’d like)
1/4 cup white wine (optional)

Put them all in the crock pot. Turn it on low. Walk away for four hours. For every additional two hours it will cook, add a quarter cup of water.

This makes for a delicious little chicken dish that I like to call “creamy chicken casserole.” It takes about two minutes to prepare in the morning and fills your belly right at night.

Like that one? Here are five more recipes, all of which we’ve eaten in the last few months. The directions for each are easy:

Combine all of this into a crock pot. Add salt and pepper to taste. Turn it on low and walk away for eight hours. Add a quarter of a cup of water for every additional two hours you intend to cook it.

Got that? That’s all you have to do for each one. Here are the ingredients.

Crock Pot Chili
1 large can tomato sauce
1 pound lean ground beef
2 cans beans (kidney beans are fine, but you can use whatever you like)
2 tablespoons chili powder
1/4 cup diced onion (or onion salt)

Simple Pot Roast
1 2 to 2.5 lb. roast
2 cups chopped carrots
2 cups chopped potatoes
1 cup chopped celery
3 cups beef broth or beef stock

Ham and Potato Casserole
4 red potatoes, sliced
2 red onions, finely chopped
1 1/2 pounds cubed ham
1 can condensed cream of celery soup, diluted according to can directions
2 tablespoons flour

(This one is very good with cheese on top just before you serve it.)

Shredded Beef Sandwiches
2 pounds beef brisket
1 tablespoon olive oil
2 1/2 cups beef broth or beef stock
2 cloves minced garlic
1 chopped red onion

(Serve this on buns – magnificent!)

Breakfast Apple Cobbler
4 medium-sized apples, peeled and sliced (try Honey Crisps)
1/4 cup honey
1 teaspoon cinnamon
2 tablespoons melted butter
2 cups granola cereal

(Start this one at 10 or 11 PM – ready for breakfast!)

It takes only five ingredients and a few minutes to come home to (or wake up to) a delicious home-cooked meal that doesn’t cost you very much money at all.

This is the seventeenth in a weekly series of articles providing a chapter-by-chapter in-depth “book club” reading of Benjamin Graham’s investing classic The Intelligent Investor. Warren Buffett describes this book: “I read the first edition of this book early in 1950, when I was nineteen. I thought then that it was by far the best book about investing ever written. I still think it is.” I’m reading from the 2003 HarperBusiness Essentials paperback edition. This entry covers the sixteenth chapter, which is on pages 403 to 417, and the Jason Zweig commentary, on pages 418 to 421.

The final five chapters of The Intelligent Investor (of which this is the first) really serve as a “wind-down” for the entire book. Graham spends the chapters looking at examples, special cases, and special topics that really almost serve as a supplement to the real meat of the book – the earlier chapters.

This chapter is a particularly interesting one, as it focuses on an area of investing that very few people in mainstream life are even aware of – convertible issues and warrants.

What are they? Convertible issues refer to financial instruments (usually bonds) issued by companies that can be converted into other financial instruments. The most common example of this is a convertible bond issued by a company in order to raise money. A convertible bond is just like any other bond – you buy it for a certain price, it pays a certain amount every so often, and when it’s finished, the bond has a face value. You might, for example, pay $9,800 for a bond that pays $400 a year for five years, then can be redeemed for $10,000. A convertible bond adds another option – you can, at any time, convert it into stock of the company that issued the bond at whatever rate was specified when the bond was issued. So, let’s say you have that $10,000 face value bond and it can be “converted” into 500 shares of stock in the company. If the stock’s value goes much above $20, it might be worthwhile to convert it.

A warrant is a long-term option to buy shares of stock at a certain price. For example, you might have a warrant for company A that lasts ten years that allows you to buy 1,000 shares of their stock at $10 a pop. If the company’s stock goes up to $20, that warrant itself has some significant value to it.

While I doubt I’ll ever find direct use for knowing how to find value when buying warrants or convertible issues, one can still garner useful principles from reading this information. So let’s dig in.

Chapter 16: Convertible Issues and Warrants
In short, Graham seems pretty wary of both of these types of investments. For the most part, throughout The Intelligent Investor, Graham seems to totally eschew the complex in favor of the simple.

For convertible issues, Graham points out that convertible issues that are issued late in a bull market are almost always an awful investment. Why? The bonds themselves usually aren’t a very good investment – your hope is usually that you’ll be able to convert the bond (or sell the bond when the conversion is good). At the end of a bull market, prices are usually inflated and are about to sink. Thus, convertible issues bought late in a bull market are usually not able to be converted at a profit, making them a terrible investment.

Here’s the kicker: the latter stages of a bull market are when most convertible issues are created and sold. Companies are usually seeking to fund expansion and big spending projects when the economy seems to be roaring and that’s when they issue things like convertible bonds.

So, in a nutshell, Graham is very wary of all convertible issues – he all but encourages individual investors to simply leave them out of their investing plans.

What about warrants? He’s pretty clear about them on page 413: “We consider the recent development of stock-option warrants as a near fraud, an existing menace, and a potential disaster.” That’s about as clear as one can be – stay away from these as well.

Commentary on Chapter 16
Zweig’s commentary here is very short, and he focuses exclusively on convertible bonds. His primary point about such investments is that, if you choose to invest in convertible bonds, don’t think of them as bonds. Instead, think of them as rather stable stocks, since the performance of convertible bonds mirrors the stock market, not the bond market.

Next Friday, we’ll take a look at Chapter 17: Four Extremely Instructive Case Histories.

Nearly all of us work hard for a living. We go to work, throw at least some of our heart, soul, and energy into the task at hand, and go home depleted of some of our energy, but with a paycheck in hand. Some people enjoy this routine and others do not.

Having worked a lot of jobs in my own life – and witnessed many, many other workers at various stages in life – I’ve realized a few things about the nature of work – and whether or not people love their jobs or not.

The biggest factor, as far as I can tell? Recognition.

Over and over again, the same pattern repeats itself. A worker decides to go the extra mile at work, doing a particular task with aplomb. Perhaps they’ll even do it a few times.

Sometimes, their supervisors and/or peers will recognize this hard work and compliment the worker on it. That’s good. Perhaps they’ll even talk up that hard work to others. That’s even better. Perhaps this hard work will be rewarded with a perk or two – a better parking spot, an “employee of the month” recognition, perhaps even a promotion. That’s great!

People that get a bit of recognition tend to keep pushing hard on their tasks. They like being seen as successful – and they want more of it.

At other times, a person’s hard work will be ignored – or perhaps it’s viewed as expected behavior, with no extra recognition. For the most part, that person will regress to doing the minimum needed to keep the job. Rather than seeing it as a challenge with a tasty carrot, that job begins to be seen as a burden.

This need for recognition runs through our lives. It feels a lot better to get positive attention from other people than it does to be met with indifference or with negative attention. It drives a lot of the little choices we make, too.

That drive for recognition is a big reason that many people make poor financial choices. Buying a late model used minivan won’t wow the neighbors, but a new Lexus SUV will get their attention. A small house won’t get attention – but a beautiful, big, exquisitely decorated one will get you some positive comments. I’ve fallen into this trap myself as a young adult, often buying gadgets partially for the ability to impress others and earn me some short-term recognition.

The painful truth, though, is that such recognition is fleeting. After the impressed people have gone away and your big purchase is forgotten about, you’re left with some big bills and a budget that’s being stretched to its limit to cover it. The recognition is over but you’re still paying for it.

Consider another path. Go for the low end on your purchases. Get that late model used car instead of the new one. Buy a smaller house. These purchases won’t get you that immediate recognition, but it does earn you several other things. You’re not stuck with the big bills, giving you breathing room to save for the future. That can directly lead you to an earlier retirement or to other things that you personally value – travel, financial security, and so on.

Perhaps more interesting is that I’ve found that good financial choices end up earning you recognition in unexpected ways. We’ve saved a lot of money by buying a reasonable home and holding onto our older cars. This has enabled us to do a lot of other things in our life. I’ve been able to switch careers – without our frugal choices, I would have never been able to choose to become a writer. We’ve also been able to become more involved in our community, donating money to worthy causes and finding other ways to help out.

Not only have those things earned us recognition, they’re also very much in line with our core values. Most importantly, though, these choices haven’t left us facing a pile of frightening bills and a subsequent shackling of our lives to a strong need for income.

The take home message? Recognition is important to all of us – it often drives the choices we make in life. But if you take some time to step back from the appeal of immediate recognition and look at the long term, it’s often much more worthwhile to make the financially conservative choice instead of spending more than we should.

I’ve always been a fan of warehouse stores. On many, many items, you can get a great deal there if you’re willing to buy a large quantity of items at once. For a person with a lot of storage space and a family (like me), storage isn’t a problem, nor is using it up.

People often ask me what kinds of items I buy there and I respond with the usual things: toilet paper, trash bags, bulk foods, and so on. These are the things that people always think of when they think of warehouse stores – the stuff you buy on a normal grocery store run, but in bulk.

However, I’ve come to find that many of the best deals at warehouse stores aren’t simple replacements for grocery shopping. Here are ten things I’ve come to purchase regularly from my local Sam’s Club instead of through other options.

Paper and office supplies Printer paper? Check. Blank prints so I can print off photos for wall decorations and sending to family? Check. Printer cartridges? Check. Bulk Christmas cards? Check. Folders and paper clips? Check.

Toothbrushes I’m pretty fanatic about replacing my toothbrush regularly. I usually replace them after two months, even though you’re supposedly able to keep them for three months – I just feel like the brushes are in poor shape and aren’t cleaning my teeth nearly as well around the two month mark. That means I need two replacement brushes between each dentist visit (where they give me a free brush). That’s four brushes a year just for me – and two for my wife – and we like to keep some extras on hand for guests. The solution? A big jumbo pack of twelve brushes or so, which saves us a lot and lasts about two years.

DVD-Rs and CD-Rs I like to burn CDs full of pictures for family members – and I also sometimes assemble DVDs of family movies to share. This means I regularly need a big cylinder of blank CDs and/or DVDs – and the warehouse store is the cheap place to get them.

Gift cards My local Sam’s Club sells a ton of gift cards for various restaurants, cell phone plans, online games and music stores, and so on. All of them are below face value, and many are significantly below face value. These are not only useful for gifting, but they can occasionally be useful for one’s personal use – if I’m planning on using the iTunes Music Store, for example, it’s worth picking up a gift card so I can get $25 worth of credit for less than $25.

Adult beverages Our local Sam’s Club has an enormous selection of sub-$10 wines, many of which are quite tasty. You can also find the ingredients for pretty much any mixed drink you might want to make there, with prices substantially lower than the local liquor shop.

Light bulbs Our home has roughly fifty light bulb sockets, which means we’re regularly replacing bulbs. The vast majority of the bulbs are 75 watt bulbs, so we simply buy the 75 watt bulbs in bulk and keep them in the cupboard. It feels rather silly to have twenty bulbs in the closet, but when you eventually use all of them and you calculate the per-bulb savings, it’s well worth it!

Tires Recently, I was able to replace a pair of tires on my truck. The total bill for replacing both tires was actually cheaper than the total cost of replacing one tire at a comparable auto shop in town – for the same kind of tire. That’s a significant and surprising savings.

Gas The local Sam’s Club has the cheapest gas prices in town, usually (not always, but usually) beating all competitors by a nickel a gallon or so. Every time I fill up my truck there, I save about a dollar – and over the course of a year, that alone can pay for a large portion of the club membership.

Underwear and socks Not long ago, I finally replaced most of my socks – my wife’s constant complaints about holes in my socks convinced me to replace them. This meant I needed to buy a lot of socks – multiple packs at once. I purchased a huge bulk pack of socks at Sam’s after comparing prices and saved roughly twenty cents a pair. I get similar savings when I buy underwear there as well.

Video games Sam’s Club has a poor video game selection, but when they do have a game, you can’t beat the prices. I always check Sam’s first before making a video game purchase – and on a recent purchase, I saved more than $10 over the cheapest price I could find online on a particular game.

It’s not just the expected stuff that makes warehouse shopping a value for me – it’s the unexpected things that really have made our membership worthwhile.

A few days ago, Seth Godin (my single favorite blogger by far) wrote the following:

Think about how often your goal at a conference or a meeting or in a project is, “don’t screw up!” or “don’t make a fool of yourself and say the wrong thing.” These are very easy goals to achieve, of course. Just do as little as possible. The problem is that they sabotage your real goals, the achievement ones.

That paragraph really hit home for me. There are often times when I’m writing for The Simple Dollar when I have to make a fundamental choice. Do I say something controversial that actually represents what’s on my mind, which risks alienating a portion of my audience but also engages people? Should I reveal something about myself that could be personally painful, especially since almost everyone I know well reads The Simple Dollar? Or do I put that idea aside and chase the safer idea, the one that won’t alienate anyone, but won’t really engage anyone, either?

I felt this same push and pull at my previous job, too. A large portion of my time was spent on software development and system administration. I was in charge of a handful of servers and I was also responsible for writing some code that had to be deployed on those servers. This led to a balancing act whenever I had to write code for a new feature: should I implement the most robust and complicated version of the feature (which would stress the servers more and make my system administration job more stressful), which would wow the users, or should I implement a simple version, keeping people minimally happy and also making my system administration job easier? It was a balance that I constantly had to walk – and it also wore me down over time, because I felt like every choice had become a milquetoast compromise.

One choice is easy. It lets you more or less maintain where you’re at and enables you to avoid having to choose the harder path. The only problem is that, over time, you don’t become known for greatness. You become known for mediocrity.

The other choice is much harder. Whenever you choose to take the hard path, you not only have to take a more active role in things, you also risk alienating people. Yet, this is the only path that leads to great success in life. You won’t be known as mediocre – but you do run the risk of being seen as a failure.

We are given many of these choices every day in our lives. When we go to a work meeting, we can choose to engage the discussion, or we can sit there and be quiet. When we go to church or to any community meeting, we can go out of our way to talk to others, or we can keep to ourselves and go through the motions. When we work on a project, we can do what’s expected and get the job done or we can go the extra mile and develop something truly impressive that also runs the risk of not being widely accepted, either. When the call goes out for volunteers, we can either sit there quietly or we can step up to the plate and give it a try.

One path leads to mediocrity. The other path leads to the possibility of success, but also runs the risk of failure.

If you want great things in your life, the choice is clear. It’s time to step up to the plate and take that risk.

Suddenly, my three year old son is very interested in nature and the outdoors. He’s started noticing tons of things outside (even in the Iowa winter) and has started requesting that we watch nature documentaries when we watch television, instead of his usual previous standbys of various PBS shows.

This makes me even more anxious for spring. I simply can’t wait for a nice spring day when I can take my kids (both my son and my one year old daughter) out into the woods to wander around and discover whatever we may find.

We’ve gone outside a bit during the winter, but with literally feet of snow on the ground here and a temperature that’s rarely above 20 degrees or so, exploration is limited for a three year old.

Our solution? So far, it’s revolved around nature documentaries. We’ve been DVRing a few nature-oriented series, and we’re thinking of picking up a copy of the BBC’s Planet Earth documentary series and watching them together. It’s not an ideal substitute for outdoor exploration, but when the snow outside is almost as tall as he is and the temperature rarely breaks above twenty degrees, we’ll do what we can to keep him interested.

As always, any suggestions are welcomed.

Six Options If You’re Underwater in Your Mortgage I’ve actually considered a post like this, considering I’ve sent a list much like this one to several people who have written in. (@ wise bread)

Positives from Downsizing Our Home Most people want to upgrade their homes to something larger. Matt found great joy in downsizing – it saves money and needs less maintenance, providing more “life space” for other pursuits. I’d like to … “go sideways” with our home. The square footage is right, I think, but I’d really like to rearrange the rooms. (@ unclutterer)

5 Credit Card Company Tricks — and How to Thwart Them If you’re struggling with your credit cards, this is an excellent post to read – it’s got a lot of insights into how credit card companies manipulate people. (@ get rich slowly)

15 Uses for Coffee Filters We have a big pile of coffee filters that rarely get used – they’re for the big coffee pot that we only get out when there are guests (my wife drinks coffee, I do not – so we use a tiny pot most of the time). Most of these ideas are great uses for those filters that are just sitting there gathering dust. (@ gather little by little)

Depression, Here It Comes I thought I’d link to an article by someone who is predicting that the economy gets much, much worse before it gets better – a very different perspective than my own. (@ first million at 33)

An old friend of mine just dropped $2,000 on a large flat panel HDTV for his den, intending it to be the centerpiece of his Super Bowl party. He sent me a picture of it along with an email thanking me for talking him out of buying a similarly-priced TV last year, given how much money he saved by waiting.

How much money did he save? Let’s calculate the two scenarios.

Buy it NOW! If my friend had plunked down $2,000 on his credit card last year, he would have faced a big pile of credit card bills.

First of all, that $2,000 TV actually costs him $2,140 after sales tax. He decides to put the entire balance on his 19.9% APR credit card and decides to pay $214 a month – 10% of the TV’s total cost.

Given that payment plan, he pays $214 each month for ten months on his credit card, then makes a final payment of $177.35 during the eleventh month, giving him a total bill of $2,317.35 for the television.

Buy it in a year! Instead, he decided to save $180 a month in a savings account for his television, a savings account that earned 2.5% interest.

After a year, my friend checks his account balance and finds that the account has $2,184.92 in balance. He empties the account, leaving him $44.92 in cash after buying the television. His total contributions? $2,115.08. (That’s his $2,160 in savings, minus the $44.92 in cash left over.)

The difference By choosing to save up for that television and pay cash for it instead of just tossing it on the plastic, my friend saved $202.27. That’s enough money to fill his gas tank five times. That money can make a car payment. That money can cover the expenses for an awesome Super Bowl party. Or, he can simply look at it as a 10% off coupon for that television he just bought.

The take home message It’s pretty simple – if you’re considering a large but non-essential purchase, start saving for it in bits and pieces in advance of buying it. This achieves two powerful effects. First, you’re going to earn some interest on your savings, giving you an extra bit of cash to help with the home stretch of saving. Even better, though, you won’t be paying interest on your credit card or payment plan – that’s simply money lost. When you add those factors together, it can easily be worth 10% of the value of the item – and it can often be much more than that if you’re saving for a larger item.

This seems like such a simple point that it should be common sense, right? I thought so until yesterday, when I stood in line at Sam’s Club behind three different people buying large flat panel televisions – and all of them paid with a MasterCard. While it’s (hopefully) true that some of them might be paying that entire bill off immediately, it does reveal that many people out there are making big, impulsive purchases.

Hopefully, they’ve saved up for it.