Pull Yourself Up By Your Bootstraps!

Benjamin Franklin once said, “He who spends less than he earns truly has the philosopher’s stone.”

Now, that might sound like common sense to you, and it is. You’d be surprised, though at how many people actually live way beyond their means. If you don’t believe me, how do you think we got into this economic nightmare in the first place?

This past election year we heard chants about change (in mind set, way of life, belief)? I can’t say. But one idiom stuck with me during one of the speech by a candidate, “Pull Ourselves up by the bootstraps” I am omitting “the dusting” part of it. Anyways what is this?

Nobody really knows the origin of the idiom, “Pull yourself up by your bootstraps.” It doesn’t really matter where it came from or who said it first. The point is in the meaning. To pull yourself up by your bootstraps is to improve your own situation without any help from anyone else.

 I’m guessing that the idea behind it is that if you get yourself into a mess, you can get yourself out. Well, at least that’s how I’m interpreting it.

So you got yourself into a mess. So, you want to pull yourself up by your bootstraps, but you don’t wear boots with straps, could care less what the idiom means, and just want someone, somewhere to give you the tiniest bit of hint on what to do to get yourself out.

 Your Faithful Frugal Friend is here to help. Read on for some strategies you can use to help improve your financial situation in this week’s top picks:

The best sites for saving money

Bargaineering. Jim Wang’s blog offers plenty of good personal-finance content along with reviews of banks, credit card offers, books and products.

Consumerism Commentary. Track blogger Flexo’s net worth as he and partner Smithee write about saving money on everything from banking to travel.

The Dollar Stretcher. If this site has had a major redesign since its launch in 1996, I missed it. But you don’t need fancy graphics when you have a huge library of articles and tips about saving money. Even black-belt frugality experts will find new information here.

Lessons from Warren Buffett

From the letter to the shareholders of Berkshire Hathaway, below is the investment wisdom conveyed by the “Oracle of Omaha”, Mr. Buffett himself:

The Three Gs
Let us suppose that you are planning to lock away the surplus money with you in a bank savings account and three different banks approach you with three different offers:

1. The first bank takes a one time deposit and pays you a very attractive interest rate, which will continue to increase as years pass by;
2. The second bank pays a decent interest rate but also asks you to increase your yearly deposits at a fixed rate, which will also bear a decent interest rate; and
3. The third banks pays you a very poor interest rate and also asks you to increase your deposits at a high rate, which in turn yield the same poor interest rate.

It is difficult to imagine a depositor choosing any other sequence than the one mentioned above if asked to rank his preferences. However, while investing in companies, the very same depositor fumbles quite often. He ends up investing in firms that exhibit the characteristics of deposit schemes similar to options b) and c) listed above.