Down to my last dollar!

No chance. Ok, extremely slim chance. Thanks for the advice I’ve received from many, but I won’t be ‘investing’ my last dollar on the lottery. Why not? Well, despite the fact that 1/3 of Americans think that winning the lottery is the only way become financially secure in life, you actually have much more chance of being hit by lightning, than being singled out by ‘the fickle finger of fate.’

If you don’t believe me, check out your odds here.

I’m not saying don’t, but…

Warren Buffet aka ‘The Sage of Omaha’ counts his wealth in billions. He was probably down to his last dollar in around 1930 (when he was aged 11). However, his advice on successful investment applies whether you have a dollar or a billion dollars.

According to this fascinating article, he attributes his success to reading one book, ‘The Intelligent Investor’, by Benjamin Graham. To get a free summary, read the article, to get the full lesson, you’ll need to get your hands on the book.

No, this isn’t another tale of corporate greed, we’re talking about real food (and real profits). According to this article in the UK Daily Telegraph, baking is booming. So here’s my thought: at a pinch you can purchase cake ingredients for less than a dollar. Bake a cake (or persuade a family member or friend to help you!). Your next stop is ebay. There you can sell your creation for upwards of 5/10 dollars (if you don’t believe me, check this out). Be sure to put your profit back into more ingredients and that dollar really begins to grow.

And chef, be sure to let me know how you get on!

One of the best sites around for bloggers intending to make money from their sites is www.problogger.net . This site gives you all the information, tips and hints you might need to monetize your blog - quickly. The guy behind problogger is Darren Rowse. Darren, we salute you! By the way, I have no personal connection to the site, except that checking it out it has really helped me out on many occasions recently, and more people deserve to know about it. Not that it needs my help, it is already a firm favourite in technorati’s Top 100 blogs.

Thanks to the thoughtful person who recently sent me a copy of a new book called ‘The Power of Nice’ by Linda Kaplan Thaler and Robin Koval of The Kaplan Thaler Group. It’s subtitled ‘How to Conquer the Business World with Kindness’, but the many hints and tips it gives are applicable to all of us in our everyday lives. You might think that being nice is a fairly obvious way of doing well in life, but believe me, plenty of us could benefit from the lessons in this short book! I’m a firm believer that cynicism kills (dreams, ideas, people, you name it) and ‘The Power of Nice’ certainly affirms my belief. N.B. The Kaplan Thaler Group is ranked as one of the fastest-growing advertising agencies in the United States, with over a billion dollars in billings - so they are definitely worth listening to!

My thought for today is (yes, I KNOW, remember I am new to this!) the ‘miracle of compound interest’. It seems to be a popular topic at the moment, probably because it appears to be a risk-free way of making free money. The basic principle is that you find the savings account that gives you the highest rate of interest, put your money in it, and…er…that’s it. The interest is added to your savings, increasing their value, then further interest is calculated on the increased total, and so on and so on. As long as you leave it there, your savings will continue to grow.Of course there is always a price to pay for safety. In this case it’s one of time. Depending on the size of your savings (and the rate of interest you can find), it will take a long time to make decent money. But then, we all know that the only way to get rich quick is to rob a bank, right? (and no, winning the lottery doesn’t count - see previous post). By embracing compound interest, your money (even just your last dollar) is growing WITHOUT YOU HAVING TO DO ANYTHING. The Motley Fool explains ‘the miracle of compound interest’ much more clearly than I can.

I think I’m in love. Again.

When you’re in need of essential finance advice (like -”What do I do? I’m down to my last dollar?”) it certainly helps to hear what others have done in the same situation. Don’t they say ‘A problem shared is a problem solved?’ So here’s an idea - if you email me your financial problem, I’ll post it right here on the site (names will be changed - or not. Up to you). We’ll open up the post to hints, tips and advice (I’ll pick the most appropriate comments), and see how it goes. I’m guessing that this will work better than a forum because many more people will be able to share your problem. You can email your questions now to advice@downtomylastdollar.com (don’t send them as a comment on this post). The world is waiting to help you out!

Probably not. Cardsharps use the laws of probability to increase their chances of winning and you can use the same tools with the lottery/lotto. It turns out that winning the lottery is not as random as we might imagine.If you study the winning numbers of any particular lottery over time (quite a long time), you’ll find that certain numbers come up more often than others do. Moreover, some numbers come up less often than others (step forwards our fickle friend, the number thirteen).

This article, using the UK’s Lotto as a basis, outlines the numbers drawn most often. It also points out that whatever you do, your chances of winning a significant amount are still small to negligible. (As an aside, if you’ve read the book or seen the movie ‘A Beautiful Mind’, you’ll know that is based on the life and work of John Nash, who popularised (and won a Nobel Prize for his work on) Game Theory. If you haven’t done either of these things, you probably should.) 

Being down to your last dollar means different things to different people. You might adjust your family budget when you check this and find out what being down to your last dollar means in some parts of the world. For instance, you’ll be amazed by what $350 means to a family of four in rural Bangladesh.

The Guardian is one of the UK’s leading national newspapers (bear with me on this one…). I wasn’t a big fan of the print version, but the online version is great (and apparently one of the ‘most read’ newspaper sites in the WORLD). For the purposes of making that last dollar grow I strongly suggest becoming a regular reader of their daily personal finance section - money. Everything is set out in the type of ‘ABC’ language that even I can understand. They have a regular column called ‘cash clinic’ which gives e.g. debt and mortgage advice.