Has Your Financial Ship Been Taken Hostage By One of These 8 Pirates?

by Ron Haynes

Piracy has made a surprising comeback on the high seas, but little pirates have been attacking my financial ship for years. Just like shipping interests have had to alter their methods of operation, I’ve had to alter my habits and my budget to insure that these pirates don’t make me walk the plank.

Arriving in Grand Cayman - 1-5-09
Pirate #1 — Spending More Than I Earn

The king of the personal finance rules of thumb, spending less than I earn is easier said than done – but name one thing that isn’t. Living on less than I earn began with changing my personal spending philosophy. I’ve had to learn to moderate my cash outflows and avoid reckless spending. The gratification I get from knowing I don’t have to walk the plank is surprising. It really is a freeing experience to know that things have less control over me.

Pirate #2 – Living Without An Emergency Fund

I’ve lived life without an emergency fund and lived life with one. Guess which is better? If you’re just a job loss or a medical emergency away from financial ruin, you need an emergency fund. Most experts recommend you fund your emergency fund with three to six months worth of income, but if you make it to three to six months of basic living expenses in a liquid account, you’re way ahead of 99% of your peers. If you wonder how you can save that much, check out 17 Sneaky Savings Strategies and give them a try.

Pirate #3 – Overusing My Debit Card

Just having that piece of plastic can make you feel that the money has no end. Too many times I’ve been guilty of “guesstimating” how much was in my checking account only to be surprised … and sometimes embarrassed. Implementing a strict cash-only diet not only puts my own spending habits in perspective, but it forces me to think before making that impulse buy.

Pirate #4 – Resorting To Credit

I’ve been guilty of “wanting it now” syndrome. What’s odd is that the times that my wife and I saved money to pay for something (a tent, a camper, a vacation) it was so much sweeter than when we bought other things on credit. What’s even more odd, is that I can’t remember those other things, but I CAN remember the things we saved for.

Pirate #5 – Saving Inconsistently

Until I began making regular AUTOMATIC deposits to savings and retirement accounts, I would put money in only to take it right back out again. Slow and steady wins the race and those constant ups and downs in my savings account didn’t do anything but increase the fees I paid to the bank.

Pirate #6 – Investing in Individual Stocks

Investing in individual stocks is like playing golf. You always make four or five really good drives or putts and those few successes make you come back next time. You forget about the 103 shots that were horrible! I fell victim to chasing the dot com returns back in 2000 only to watch my portfolio crash and burn. I’ve successfully found the exact highs and exact lows of many individual stocks. I have a natural talent for it. The problem is that I buy on the highs and sell on the lows. That’s why I’ve moved my investing into index funds that represent the whole market.

Pirate #7 – Forgetting To Budget For Fun

All budgets should allow for fun, entertainment, occasional dining out, and something you enjoy. I’ve had to think about where my personal recreation priorities lie and decide how much I want to spend each month on those activities. Many experts say that if the total is more than 10 percent (5 percent is ideal) of your total household budget, it’s time to scale back. But don’t blunder by eliminating recreation altogether or your best-laid plans will eventually self-destruct. You know what they say about all work and no play …

Pirate #8 – Paying Only The Minimums

Far too many times, I paid only the minimum payments on any loans. The result? A much longer payoff and much more interest paid to the banks and credit card companies. Only when I began making more than the minimum payment did I start making progress. Today, many people are recommending that you only pay minimums until you have a healthy emergency fund in place and I couldn’t agree more. But don’t get that emergency fund in place and neglect to start making larger payments on your debt.

Just like the golden age of piracy came to an end when nations tired of losing their ships, sailors, and cargo to pirates, I’ve tired of losing my financial cargo to these eight “pirates.” Don’t let these pirates make you walk the plank.

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photo credit: kthypryn

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

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Good tips! I agree!!


Goooood article. God bless America!


That is a good list, but my ship has been taken hostage by 8 other pirates.

Barack Obama
Ben Bernanke
Tim Geithner
Ken Lewis
Vikram Pandit


@ Student
That’s the funniest comment I’ve read in a long time! Lol!

Mark Foo | TheBigDreamer.com

Hi Ron,

While I agree to 7 of the pirates you name here, I can’t agree with #6 – Investing in Individual Stocks.

It’d be OK if your intention is merely to tell us about the pirates that had been holding you hostage all this while. But if you’re giving a general advice, I’d have to dispute it.

Just to be upfront, this is not meant to be a personal attack. I’m just sharing my opinion here.

By naming #6 as one of the pirates, it gives me the impression that you’re telling people it’s a bad idea to invest in individual stocks.

I would say that it is a bad idea ONLY if you refuse to learn how to invest in stocks the right way. Every skill is learnable. Investing skill is no exception. No skill is ever too hard to learn or you’re never too old to learn a skill. It’s just a matter of whether you want to learn.

While there’d been many people who were burnt in the stock market, there’d also been many people who make a good fortune from it, and these are average people just like you and me. The only difference is they don’t follow other people’s opinions blindly, they bother to learn how to do it properly, and they were not defeated by their earlier losses.

To me, as long as there’s one person in this world who’d done it (it can be anything), it’s enough to tell me that it’s achievable. Moreover, there’d been a lot of people who’d made money from stocks, not by luck, but by sheer acumen.

Last of all, don’t forget that one of the richest men in the world – Warren Buffett – invests mainly in individual stocks. Of course, not everybody is Warren Buffett. But that doesn’t mean you can’t make some decent money from buying individual stocks. As long as you’re willing to learn, you can do it.

The two keys are get the facts right and education. And never learn from stock brokers or your money managers. They’re just sales people, not investors. Learn only from people who’ve been making money from individual stocks.

Just like if you want to learn how to play golf, you’d only learn from a golf coach, not from the person selling you golf equipments.

Please correct me if I got you wrong.




Hey Mark,

NO, go ahead and disagree with me! It adds to the discussion and I welcome it! If you read tomorrow’s post, you’ll better understand why I advocate investing in low cost broad based mutual funds as opposed to investing in individual stocks. Most people don’t have the time to do the proper amount of research and most people, including “experts” with decades of experience, get it wrong. Remember that we were being advised by almost every investment house to invest in Lehman, Wachovia, and AIG just before they collapsed…

Buffet is always brought up as the exception. But he is just that — the exception. He doesn’t just invest in stocks though, he invests in companies. That is, he actually goes in and runs them since he has such a huge stake. You and I don’t get to make a decision on who is the President of the company or what investments they make or what their minimum rate of return on different projects are.

Check out tomorrow’s post and also check out Dare To Be Dull when you get the chance. Maybe you can be the exception, but I’m relatively certain I’m not!

Thanks for commenting.

Mark Foo | TheBigDreamer.com

Hi Ron,

Thank you for taking the time to reply and thank you for being such a gracious host! :)

While it’s true that Buffett is the exception, as I’d also said in my previous comment that not everybody is Warren Buffett, he started off just like everyone else. H didn’t start off as Mr. World’s Greatest Investor. He was just a Nobody who kicked start his investment career with the US$100,000 he raised from various investors.

Although US$100,000 was considered big money back in the 50’s, it was still not an amount that allows you to take a controlling stake in any listed company. And he surely didn’t bank all that 100 grand in one single stock/company. So that makes all the more he couldn’t have taken a substantial stake in any company he invested in his earlier days.

My point here is that you don’t need to have a board-seat-qualified investment in a company to reap a healthy return on your investment. You don’t need to have a big say in the company you invest in to ensure your return.

In fact, Buffett does not interfere with the running of the companies he invests in! He invests only in companies run by great people. And since they’re already run by great people, he simply sit back and let them carry on doing their job without interfering.

You’re right in saying that Buffett doesn’t just invest in stocks, he invests in companies. That’s because when you invest in a stock, you’re in essence investing in a business behind the stock! When you buy a stock, you’re actually buying part ownership of the company that runs a real business!

This is a very fundamental principle that a lot of investors seem to be missing. I’ve written a post on this principle back in Oct 08. Feel free to take a quick read by clicking on the link below.

The Most Fundamental Principle of Stock Investment.

Hope you enjoy the read. I’d love to hear your feedback. :)




I loved your post–great variety. At my site, The Debt Dance.com I am all about “feeling good”–getting out of debt in order to reach your dreams… I also strongly advise people who want weekend or side jobs (or to build a new venture into a full-time dream maker) to choose what they love to do! Life is too short to be a pooper scooper (which can be quite lucrative by the way–especially if you hire folks to work for you!) if poop makes you ill! If you’re artist–paint murals or curly-ques on porches. Do what you love–that means getting real with yourself and making decisions that build a great future–not hock it!

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