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Updated March 16, 2011. If you have been paying attention to the media, you most likely saw terrifying footage of tsunami waves destroying much of the eastern coastal areas of Japan, particularly Miyagi prefecture. Friday’s earthquake measuring 9.0 magnitude on the Richter scale triggered massive waves that leveled homes and farms, left thousands missing, forced an evacuation of the area surrounding a nuclear power plant, and triggered estimates of ten thousand killed. The natural effects extended to the west coast of the United States, where strong currents affected some ports and waves forced evacuations of some areas.

In addition, the Fukushima Dai-ichi nuclear power plant was affected by the disaster, with some injuries to employees after an explosion and a call for surrounding residents to evacuate.

When devastation hit Haiti in 2009, Americans wanted to help those affected by devastation. Unfortunately, unscrupulous individuals worked hard to take advantage of the good will. Soon after the disaster, there were many websites collecting funds purportedly for assistance. Unfortunately, many were simply scams, designed to take people’s money. There will surely be similar websites designed to trick well-meaning individuals into parting with their money.

If you plan to support the relief efforts in Japan, consider sending money to legitimate, international organizations that focus on humanitarian aid during crises. Don’t give food or supplies; it’s best to let the aid organizations decide what materials they need and when they need it. As with any charity, though, the exact dollar you send today may not go directly to Japan. Many organizations already have funds committed to relief. Your dollar will go to replenishing the money that is currently being spent.

The American Red Cross is already on the scene in Hawaii and the U.S. west coast, and has pledged financial support to the Japanese Red Cross. You can donate $10 to the Red Cross by texting “redcross” to number 90999. If you prefer to make a larger contribution, visit the American Red Cross donation center. “Your gift to the American Red Cross will support our disaster relief efforts to help those affected by the earthquake in Japan and tsunami throughout the Pacific. On those rare occasions when donations exceed American Red Cross expenses for a specific disaster, contributions are used to prepare for and serve victims of other disasters.”

Japan sits on the intersection of three tectonic plates and is thus no stranger to earthquakes. In fact, Japan’s infrastructure, at least in the cities, is particularly suited to withstand most major earthquakes, more so than the rest of the world, including California. The death toll could have been much higher with less sophisticated engineering, but this is no comfort to those displaced, hurt, or killed by the tsunami. As Japan is well-prepared, the need for international assistance is not as great as it would be for a developing nation.

UPDATED. Doctors Without Borders (Médecins Sans Frontières) has been assessing the situation, and is now providing mobile clinics on the ground in Japan. “Although injured people had been evacuated by helicopter from these areas, many elderly people were still there, some of whom were dehydrated, the coordinator said… MSF is now identifying specific needs — including oxygen, non-food items, medical items and water — and will work with Japanese authorities to assist these populations.” The organization is currently not soliciting donations for this effort, they are drawing upon previous donations that have not been earmarked for a specific cause. If you’d still like to donate to MSF, in the United States, visit the organization’s website.

Oxfam has yet to determine whether Japan has a need for this international organization’s assistance. Usually, Oxfam reserves its support for areas of the world that would not be able to support recovery on their own. Japan is a wealthy notation, and has been charitable when other nations needed assistance. Many governments, including that of the United States, have pledged support, but unlike recent disasters, Japan has the ability to handle much of the recovery.

UPDATED. The International Medical Corps is actively working in Japan right now to support the government’s response efforts. To provide $10 in support, text MED to number 80888 or donate online.

Keep the above in mind when considering your donations. Give only to organizations that have 501(c)3 status — not because of the tax deduction, but because of the requirement of public accountability.

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A few years ago, I visited the Japanese Tea Garden in Golden Gate Park in San Francisco. Japanese gardens are designed precisely to appear natural, resulting in an interesting collision between nature and man. There is a set of principles or aesthetics that guide the creation of Japanese gardens, including the dry gardens commonly called “Zen gardens.”

The basis for these modern Japanese aesthetics has existed for thousands of years and is rooted in Buddhist writings and teachings. However, the full concept of aesthetics relating to these ancient ideas has been discussed only within the past two centuries, as the the traditional Japanese concepts have been infused with the Western idea of art and aesthetics.

These same Japanese aesthetics, the attributes that define a Japanese garden, can be further stretched by the Western mind to relate to other areas of thought. If you are particularly interested in personal finances, as we are here at Consumerism Commentary, you might attempt to apply these concepts to attitudes and behaviors surrounding interaction with money.

Here are seven aesthetics rooted in Japanese culture that can be drawn upon to make us think about the way we live with and deal with money, from personal expenses to investing.

kanso 簡素

Keep your finances simple. The extreme limit of necessity would be to have no other financial accounts but one checking account for paying your bills. Simplifying at this level may beyond the limit of practicality even if still possible. But there is no reason I should continue to have savings accounts at seven different banks, even if seven is an odd number, compliant with other aesthetics.

In addition to utilize as few banks as possible, simplify your investment accounts. Keep your investments in one account in one index fund or target retirement fund that matches your risk profile. This also makes it much easier to evaluate your asset allocation to ensure your investments on the whole match your tolerance for risk.

There is rarely a need to have more than one credit card for your personal matters. Zero is an even better number.

Simplicity in all financial matters is an attainable goal.

seijaku 静寂

Managers of actively managed mutual funds earn their pay by buying and selling investments frequently. Index funds take the opposite approach by matching a stock index, adding or removing stocks only when the index does, which is rarely. Index funds embody this concept of stillness. Unnecessary activity, like stock trading, makes the stock broker rich while you’re adding risk and decreasing your chance of beating an index fund’s performance.

Keeping your wealth still and motionless allows time to have a chance to cultivate it. The effect of compound interest increases when you let it work for decades.

If you’ve simplified your finances down to a small number of accounts, you can further keep your money motionless by removing the necessity of transferring funds from one place to another. The 0% balance transfer game or otherwise moving your credit card balances from one card to another is in direct conflict with this aesthetic.

datsuzoku 脱俗

Break free from your possessions. We buy things because they reflect who we are or who we want to be, but no thing can be a true reflection of a self. Not only do material possessions drain you of funds that could be spent on necessities, but you will have less money for sharing with others within and outside of your family.

Break free from conventional thought and following the bandwagon. You are free to be your own person and find your own path. You should never feel trapped in a job or a career. Even a steady bi-weekly paycheck is a pattern that could be broken without fear. With creativity, draw income to you through something unexpected.

Don’t confine yourself to your budget. The ultimate way to grow wealth is to spend less than you earn, so as long as that continues, you can break free from your budget and enjoy flexibility without too much worry.

koko 考古

Focus on the bare essentials. Add something to your life only if it has a functional purpose and fills a need. This concept is a nod to frugality and sparsity. For example, do you need three televisions, one for each large room in your house? Do you even need one television when you can find entertainment, including comedy, nature, and drama — possibly even crime-focused drama — for free, by sitting in a park and watching other people interact? Wouldn’t it be more fulfilling to visit a National Park than to sit on your couch and watch a documentary about it?

Decide what in your life is not essential and eliminate it. If something does not add value more than or equal to its expense, consider it a candidate for elimination. I think immediately of the interest that you pay on a credit card balance. Once you pay interest, you’ve paid more than the value of whatever you’ve purchased with the credit card. If you decide a $1,000 television brings $1,000 worth of value into your life, then it may be worthwhile. But if you put that on a credit card and pay the balance and interest over time, the new question is whether that $1,000 television added $2,000 worth of value into your life.

shizen 自然

You should represent yourself to the world truthfully and without pretense. There is no need to purchase expensive cars and houses when necessity allows for lesser purchases. Don’t concern yourself with “keeping up with the Joneses.” Without the need to show the world you have more money than you really have, you will lose the desire to buy more than you can afford. As a result, the chances of falling into the trap of debt from unnecessary spending will diminish.

My thoughts on this are drawn to people with public-facing careers. Real estate agents, for example, often want to project an aura of success. If clients believe that the agent is rich, the clients will then believe that they are successful agents. The natural conclusion is that these agents are successful because they represent clients fairly and offer quality houses. The same is true for lawyers whose business is representing clients in court trials. Lavish spending projects an image of wealth, which indicates to prospective customers a history of successful court appearances.

This is all show and all pretense. Anyone can look wealthy or successful thanks to the availability of credit. You can’t see what lurks beneath someone else’s surface.

Do not cover up all that is natural. Do not hide money or money-related problems from your partner or spouse. Finances should be part of a communication that is open and honest, not hidden beneath layers of creative stories.

fukinsei 不均整

Create a budget, a monthly spending plan that outlines your limits for expenses in a variety of categories that make sense for you. A budget by definition starts out the same each month but will look different by the month’s final day. Life’s asymmetry is natural, and your budget should reflect this asymmetry while maintaining balance. You spend more for gifts as the December holidays approach, so you might budget more for gifts in November and December than you might in June or July. In order for this asymmetry to be balanced, an increase in one category at one time should correspond with a decrease either in another category or at another time.

This flexibility is essential for creating a workable budget. A budget should free you, not trap you.

Balanced asymmetry appears elsewhere. “Work/life balance” is a relatively new concept that is based on this idea. When my employer talks about “work/life balance,” they are not trying to imply that we should spend an equal amount of hours in our life between our career and everything else we do. It is an asymmetrical approach to living a more fulfilled life.

yugen 幽玄

Whenever your personal financial issues are public rather than private, choose subtlety over directness. Do not brag about your successes. There is no need for you to have your latest business acquisition or marriage listed in your college’s alumni magazine. If you give charitably to an organization, you do not need to publicly list your name or the amount of money you donated.

In the business world, there is a movement towards personal branding. It is good for your career to find ways make yourself stand out among your colleagues or among a sea of job applicants. While I would agree that it’s important to protect your identity, particularly online, from anything that might damage your reputation, the best way to stand out is to be the best rather than to declare you are the best.

Let others declare it for you.

A guide, not a rule

While it would be great if all of the above could apply to our interactions with money all the time, I like to look at these aesthetic concepts as a guide. Just considering these ideas and allowing yourself to think about money in a different way can be enlightening. Perhaps you can strive to achieve several of these concepts in your own life, or perhaps you can appreciate this way of living even if you choose to relate with money in a different manner.

Simplifying my finances is one way I can start applying this approach to my life. As I mentioned above, I currently use seven accounts for my savings. Many of these I open so I can review them for Consumerism Commentary, but even the purely personal bank accounts number too many. Do you or would you apply any of these aesthetics to your finances?

Disclaimer: I am not an expert in Japanese philosophy or, for that matter, in personal finance. I drew the above concepts of Japanese aesthetics from a variety of sources.

Photo credits: semihundido, laRuth, DieselDemon, 田中十洋

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The Best American Cars of 2009

This article was written by in Consumer. 7 comments.

Consumer Reports leaves little to the imagination when in the April issue, the editors state emphatically, “The best vehicles are built by Honda, Subaru, and Toyota.” Yet, if you are feeling patriotic, you want to single-handedly save an entire domestic industry, you’re not worried about future service from a company that may no longer exist, or you want to do your part to try to save thousands of American jobs, you may ignore this and buy an American car. For you, CNN has parsed Consumer Reports’ ratings to find the highest ranked domestic vehicles.

  • Family sedan: Chevrolet Malibu at $21,605, 30/22 mpg
  • Small car: Ford Focus at $15,520, 35/24 mpg
  • Upscale sedan: Lincoln MKZ at $32,695, 28/18 mpg
  • Luxury sedan: Cadillac DTS at $46,280, 23/15 mpg
  • Small SUV: Ford Escape Hybrid at $29,645, 31/34 mpg
  • Mid-size SUV: Ford Taurus X at $28,270, 24/17 mpg
  • Pick-up: Chevrolet Avalanche at $35,460, 20/14 mpg
  • Green car: Ford Escape Hybrid at $29,645, 31/34 mpg

Consumer Reports admits, as they have been for the past few years, that the quality of American cars is increasing and that the fact that a car is produced by a Japanese company doesn’t automatically guarantee reliability.

The testers at Consumer Reports do not receive cars directly from factories as other publishers do. Rather than reviewing a superbly tuned and tested vehicle, designed specifically for those who write reviews at other publications, Consumer Reports publishers buy cars from dealers just like a typical consumer would. They visit the dealerships and buy the car directly without mentioning their association with Consumer Union. This ensures they’re seeing the same product the typical auto consumer would see.

Who makes the best cars?, Consumer Reports, April 2009.
Best American cars, CNN Money, March 9, 2009.

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This is today’s big news, and you’ve probbably heard about it already. This morning, President Bush approved three-year loan to GM and Chrysler which would give these companies $13.4 billion now and $4 billion in February. There are strings attached.

Although the loans have terms of three years, the government will require the companies to pay the balance back in full by March 31 if the corporate leaders cannot find a path to stability. The government will become part owners of the companies and will have oversight of executive decisions. The deal also requires that the automakers limit compensation and benefits, provide competitive wages, and eliminate the “jobs bank.”

The jobs bank allows union auto workers to still receive pay after being laid off, and even the Japanese, non-union automakers have a similar policy. The union has suspended the jobs bank already.

Do you think the automakers are making enough concessions in exchange for these loans? My concern is that even with this money, one of largest government interventions in a supposedly free market economy, the industry might not be salvageable.

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The Decline and Fall of the U.S. Dollar

by Sasha

The U.S. dollar hit record lows today due to concerns that China might shift its foreign exchange holdings elsewhere. I’d been concerned before when I first heard that the Canadian dollar was ahead of our own, but today, The Guardian reported that the American dollar had reached a 26-year low against the British pound: By ... Continue reading this article…

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Guest Post: The Weak Dollar is Killing Americans’ Wealth

by Flexo

This is a guest post from Pinyo, author of Moolanomy, a personal finance blog about money, wealth, investing, and more. Subscribe to Moolanomy’s RSS feed here. In this article, Pinyo’s excitement about his net worth increase is tempered by the declining value of the dollar. I just completed my September net worth review and noticed ... Continue reading this article…

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Quicken: Schedule This Payment?

by Flexo

You know you’ve been ordering take-out too often when Quicken believes it’s a bill and wants to schedule a regular recurring transaction to Sultan Wok Chinese and Japanese Restaurant. By the way, I have a copy of a free copy of Quicken Basic 2007. Comment here with the strangest thing you’ve ever entered into Quicken ... Continue reading this article…

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The Blame Game: Poor Money Management, Part 1

by Flexo

There’s a discussion at StopBuyingCrap about credit card companies’ evil tacticts. In fact, Cap comes clean with this humble admission: No body forced me to buy the mountains of Japanese comic books, computer hardware, and automotive parts. Sure, the credit card made it easier for me to spend money I didn’t have — but the ... Continue reading this article…

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