September 28, 2012

Today in class, my group worked on the car opportunity cost project. We tried to find how much it would cost to get an oil change, but we realized that there are a lot of factors that contribute to that. Apparently the price depends on the engine type and the type of oil that goes in that. So we still have to figure that information out. We did, however find the cost of the brake change and the average insurance cost. I also found the depreciation cost for the used car using a calculator.

This is the website I used for the car depreciation. You enter the purchase price, the current vehicle age in years, and the time in years the vehicle is owned. When you click calculate, it tells you the first year depreciation and total depreciation for the low rate, average rate, and high rate of depreciation. I found it when I was googled "car depreciation calculator" for the project. When I searched some more I found that the depreciation rate is around 15% each year.

This weekend I spent money on materials I needed for art, I bought some clothes, a wallet and I bought some stationary that I needed. Together, everything was around $32.

September 26, 2012

Today in class we got ourselves in groups and we had three choices to choose from: the car opportunity cost one, the investment plan one, and the real estate one. My group decided to do the car opportunity cost project. It took us a while to find cars to compare but in the end we found a new car (a Ford Taurus) for $26,600, a used car (a 2000 Ford Taurus SES) for $3,100, and a leased car (a 2010 Ford Taurus SHO) for $499.99 every month. I also found a calculator that finds the depreciation cost at a low, high, and average rate of depreciation.

I don't think I really spend that much money, usually I pack food and I usually only buy food during my free.

September 24, 2012

Today my group and two others presented the project about college. For this project, we had to compare Ivy League universities with normal universities to see if the price was worth it. We concluded that you could make more money if you went to a normal university and invested the tuition difference between that university and an Ivy League. My group compared four universities: the Massachusetts Institute of Technology (Ivy League) versus the University of Massachusetts Lowell (state university). The price of MIT for all four years would be $228,040 while the price of the University of Massachusetts Lowell would be $88,068. The difference between these is $139,972 and if you invested this in passive/index funds, updated your portfolio every year, and kept your bond percentage the same as your age, you could make millions of dollars in the long run. The mistake my group made was only deducting the state income tax and not the federal tax, so our net income was quite inaccurate; therefore, our data for what you would be left with if you invested was wrong. Other than that, I think we were accurate.

When I talked to my father, he said that if my sisters or I were ever accepted to an Ivy League school he would not think twice about sending us. He said that because it would never be a problem for my parents to pay the tuition fees and he thinks the connections that you get from attending a top-tier university are worth it.  He does believe, however, that you can be successful with a more mediocre education because it depends on how motivated and driven you are. We discussed people who even dropped out of Ivy Leagues like Bill Gates and Mark Zuckerberg who managed to become extremely successful. My dad thinks they are just outliers though, those are very rare cases. I think the reason why he would want us to go to Ivy Leagues might also be because he would want to live his dream through us. When he was younger, he really wanted to go to MIT but since he lived in communist Poland, his choices were very limited, so he ended up going to an obscure German university. However, he still managed to become quite successful, so I still don't think going to an Ivy League is worth it.

This past weekend I barely spent any money even though it was a long weekend. I literally only spent $10 and that was because I had no money on my ezlink card and needed to top it up to take the bus and MRT. The reason I didn't spend very much money was because on Thursday I stayed at home to do my homework, on Friday I went to my friend's birthday party and I didn't have to pay for anything, on Saturday my friend invited me to the Maroon 5 concert and she paid for everything, and on Sunday I stayed home and did homework.

September 18, 2012

Today in class we watched presentations about the opportunity costs of universities. One group actually did quite well, one of the members, Tanya, repeated everything to make sure it was all clear. They also had everything organized in tables to make it easy to understand. The one thing wrong was that one of the tables wasn't the same as the others because the universities were switched. Another group put too much information on the slides, instead of bullet points, there were paragraphs. So it was pretty hard to read.

During the long weekend I didn't spend any money because I went to a birthday party and my friend paid for that. Then the next day I went to the Maroon 5 concert because my friend invited me and I didn't have to pay for that. The rest of the time I just did homework.

September 14, 2012

In class we talked about this article. It talked about Zurich International and Friends Provident and how you shouldn't invest with them. They sell investment products combined with insurance products which is apparently two things you should never combine. Many of the salespeople also don't understand what they're selling, so you really shouldn't trust them. With many of these companies you also sign a contract with them to stay for many years, and if you want to leave you lose lots of money. You also spend a lot of money on the high fees the company makes you pay. In the comments section of the blog post there were lots of stories about people who had bad experiences with this company or others like it.

Once again, this weekend I spent less than $30 so I am very proud of that. I spent it on food and a birthday present for a friend. I'm actually pretty proud of myself because I thought that I would've spent more on weekends.

September 13, 2012

In class we kept working on our projects. I think we have almost finished. We have all been working on it together. Each one of us worked on a different slide and then we looked over the others to make sure that they were correct and they all said similar things. We also added graphs at the end for a clearer comparison. I think the one thing we still have to add is the additional expenses.

I was talking to my dad about universities and I told him that I might want to go to an art school. He said that  the school would have to be accepted by a certain organization called Scholar's Choice. It's a 529 savings plan and apparently it's the one my parents have been using to save money for my college education. I remember talking about this in class one day too. I think it's very interesting that it only accepts some schools.

Lately, I haven't been spending very much. During the school week I might buy lunch or a snack, but that's only a few times a week so I don't really spend very much.

September 10, 2012

Today in class we discussed if the cost of Ivy League schools is worth it. I personally don't think so. I believe that it really depends on the person and how motivated they are. I was talking to my father and he told me that he really wanted to go to the Massachusetts Institute of Technology, but since he lived in communist Poland, his options were very limited. So he ended up going to an obscure university in Germany where he studied computer science and worked odd jobs to pay for his college tuition. Then he finally managed to move to Silicon Valley, California he worked really hard to achieve his successful career. So obviously, you don't need an  degree from an exclusive school to be successful, you just have to be really motivated. I also found it really interesting when Mr. Hallam told us that one of his friends who works at Google said that Google doesn't like to hire graduates from Ivy League schools because they want team players instead of people who are incredibly driven to be independent.

Since the beginning of the school year, I have my total personal finances have been $382.95. Looking through all the money I've spent, I realized that most of the time I buy myself food. The most expensive thing that I have bought has been the Adobe CS6 package for $169 because there was a student discount.

Projectile Motion Video Analysis Lab

Graph of x-position vs. time with best fit line:

1.      Equations that describe the x-position vs. time

y    The equation of the best fit line is y = 0.9120x - 0.06167. The slope tells us the velocity of the ball.  

y

2.      Description of the horizontal motion

     When the ball is thrown horizontally, there is actually no acceleration if there is no air resistance. 

      Graph of y-position vs. time with best fit line:

 

     

      7.     What can you say about the rate of change of the y-velocity as a function of time? How does the value of the slope of the linear fits compare to the acceleration of a freely falling object?

          The y-velocity changes as time passes. It will increase until the ball reaches the floor and then as it bounces again, the y-velocity will be less than what it was in the previous bounce. The slope of the linear fit is constant and negative so the acceleration would be constant.

8.     Explain the differences in the horizontal and vertical components of the motion of the projectile in terms of the force(s) acting on it after it was launched.

      The horizontal component remains constant throughout the whole thing. The vertical component initially starts at 0m/s but then accelerates and decelerates at a rate of 9.8m/s^2.

September 6, 2012

For homework we were supposed to read chapter three of Mr. Hallam's book, Millionaire Teacher. Then we discussed it in class. I learned that 12B1 fees were basically used to pay for advertising, so I think that might be why actively managed funds are more popular than passive funds. Also, we learned that active funds are not very predictable, they might look successful or have five stars on morningstar.com, but then they might just fail all of a sudden. They also usually don't last more than 15 years. Actively managed fund managers sometimes invest in passive funds because they know they're better, but they encourage investing in mutual funds because they earn more money. If you hire an investor, he will probably convince you that mutual funds are better because they will get him more money.

I was reading this, and it said that mediocre passive funds usually still do better than 75% of active funds and that active funds are so popular because most people won't settle average returns. Active fund managers try to trick people into thinking that they are beating the index by showing the profitable funds in the past and they merge their funds with others. Sometimes funds don't even release all their performance data, only the ones that show success.

This weekend I spent around $29.70 which I don't think is very much so I think I'm doing alright. I decided to switch from recording my personal finances in a notebook to recording them in excel. I just don't think the notebook was really working, and since I already use my laptop all the time, I thought it would be a lot easier.

Acceleration Lab: Speeding Up and Slowing Down

The position graph displayed by the motion detector was positive; it stayed constant then increased and then stayed constant again. The slope of this graph represents the velocity of the object.

The velocity graph was positive since it slightly increased over time. The slope of this graph represents the acceleration of the object.

The acceleration graph was also positive, and like the velocity graph, it only slightly increased.

September 4, 2012

Today during class we talked about the difference between passive and active investing again. In this article, Mr. Hallam wrote about how the Couch Potato portfolio is better than Hedge Fund portfolios. Couch Potato portfolios are very simple to manage, all you have to do is balance your stocks and bonds at the end of every year, and they still manage to make more than hedge funds which usually fail. The index (used in passive investing) is basically made up of every stock in the market, so nobody manages it for you and nobody sells or buys stock. This is a lot less riskier than active investing because you don't have to predict direction of the stock market. So the best thing to do is to keep a balanced portfolio which has the percentage of bonds matching your age and the rest stocks, as shown in this article.

My personal spending has been going very well. This past weekend I spent less than ten dollars because I only left the house once to buy folders and fruit. I personally think I've been doing very well with my personal finances because I really don't spend very much. During the week I don't usually spend very much since I bring lunch to school and I don't really need to buy anything else. One of my neighbours also asked me to feed her cats twice everyday for a month for ten dollars a day, so by next month I will gain around 300 dollars from doing that. I probably won't spend that money because my mom will most likely make me put that money in my savings account.

August 31, 2012

Today in class we mainly just worked on our projects. My group found that you save millions of dollars by going to a state university rather than an ivy league school. Unfortunately we have to redo many of our calculations because instead of calculating the total cost for all four years, we only calculated the cost for one year. So, that is something we have to fix. Other than that, I think we understand how to do it, and I think we will get quite similar results.

I was reading this article which talks about if the costs of ivy leagues are worth it. It says that when Ivy League graduates go into the working world, they usually have more success because they stand out to recruiters and they get higher salaries. In the University, they also manage to get a lot of important contacts which could potentially be helpful in the future. However, it's not needed for success. Many of the most successful people didn't go to a prestigious school. I discussed this with my dad and he said that Ivy League schools are definitely worth it because you get a better salary and better opportunities, however he thinks that it isn't necessarily needed for success. He is a good example. Since he lived in communist Poland, he didn't have many choices on where to go so he went to an obscure university in Germany and studied computer sciences. Then, with the help of an organization, he was able to move to the Silicon Valley and start making something out of himself. He said he was able to become successful because of his motivation, not his college education.