Wednesday, May 21, 2008

Two Pennies Earned

This post is for Dr. Mihm, who relies on my blog to get him through the day.

Recently, The V-Train and I paid off some of her student loans. Dr. Mihm called me a couple days later to tell me he was doing the same thing. The purpose of the call was to figure out a way to game the system to get airline miles from the loan payoff (we couldn't figure out how), but we got to talking about how good an "investment" paying off loans is right now.

These student loan interest rates were at about 6.5%, so paying them off is essentially a 6.5% return -- risk free. There is no other risk-free or even low-risk investment paying anywhere near 6.5%, so this is a very reasonable "investment" option. Dr. Mihm mentioned that after maxing out the 401ks, paying down the student loan was the next highest priority.

But should you max out the 401k first in this instance at the expense of paying down the loan? I'll make an argument that maybe you should not. The first thing to realize is that paying down a non tax-deductible loan (car loan, credit card, student loan for some people) gives you the equivalent of a TAX FREE return at the interest rate. Let's do the math. Say the interest on your non tax-deductible student loan is $500. To pay that $500, you would have had to earn $500 after tax, or $685 in gross salary if you're at the top 28% marginal tax rate, plus 9% for California taxes. Andrew Tobias put it best when he said "a penny saved is two pennies earned" (tax rates were a little higher back then, and federal plus state taxes added up to nearly 50%).

So even if a 401k were tax free, you'd have to earn 6.5% in your 401k for it to be a better deal than paying down the student loan. Will your 401k earn 6.5%? Well it could, but it's not guaranteed the way the 6.5% return from the student loan is. Warren Buffet has, in his last letter to Berkshire Hathaway shareholders as well as in interviews, expressed great skepticism that the market will continue to return 8%. A 6.5% risk-free return is unheard of right now so it's really a great time to pay down a 6.5% loan.

But to make matters worse, a 401k isn't even tax free. It's only tax-deferred. At some point, you're going to have to pay your 37% tax on that money... unless tax rates go up. So you'd have to earn a somewhat higher rate than 6.5% to make it the equivalent of paying down the loan.

So what's the interest rate at which I'd pay down a loan rather than invest in the stock market in a taxable account? Well let's assume a conservative return for the stock market over the next few years since we're comparing against a risk-free option -- I'll go with 6%. Let's further assume these stock market returns would be taxed at the current 20% capital gains rate (though the likely next president has indicated he'd like to raise that rate) and your after tax return would be about 4.8%. Therefore, I'd pay off any loan with an interest rate higher than 4.8% vs. putting the money in a taxable account.

All in all, with interest rates plummeting, it's a good time to re-evaluate your debt, and maybe move the line that separates your "good debt" from your "bad debt".

Wednesday, March 12, 2008

How Underpaid Am I?

Wow. A co-worker and close friend of mine, who has the exact same job that I have, and who's current salary is the same as mine, just got a job offer that knocked him flat.

- This job is compensated so much higher than our current job that I could tell you his salary today and it wouldn't help you guess the salary of the new job.

- If you wanted to express the relationship between the two salaries as a circle, the old job would be the diameter, and the new job would be the circumference. Then you'd have to add a line or a lump or a funny hat to the top of the circle to make it accurate.

- If he wants to save half his new salary, and only half his salary, his spending will have to increase dramatically.

- His salary has increased so much that if it were expressed in British pounds, and you accidentally misread it as dollars, you'd still be impressed at how much of a raise he just got.

What does this mean for me? Sadly, very little in the short term. I'm not terribly underpaid in my industry or compared to my b-school graduating class, and the odds of me going out and finding a job like this for which I'm qualified are very close to 0. Even though we have the same job today, he was actually uniquely qualified for this job, and it's just dumb luck that the stars aligned to put him in it.

The good news for me in the long term is that my "network" now contains yet another person who's compensation can be expressed as a large improper fraction of mine. Maybe I can be his lackey or something and draft off his success.

Monday, February 11, 2008

How to Tell When I've Stopped Caring About My Job

How to tell when I've stopped caring about my job:

- I stop shaving and wearing slacks, or otherwise abandon pretense at maintaining a professional appearance.

How to tell when I've really stopped caring about my job:

- I mostly do the above, but I occasionally show up in a suit. You know, just to mix it up.

Friday, January 25, 2008

You CAN get by on $496,000 per year

My favorite personal finance book is a short one by Andrew Tobias: The Only Investment Guide You'll Ever Need. Over the years I've read it many times and given several copies out as gifts. As I am utterly incapable of producing my own topical content, I thought I'd free-ride on old Andy for a while, and tell you about one of my favorite chapter titles of all time.

The title of the chapter is "You Can Get By On $165,000 Per Year". Now if you live in California or New York, you're probably thinking to yourself "well, what's so strange about that? I mean I wouldn't want to have to do it, but I think my mom's cousin gets by on less, and so does this one guy I met at the bus stop, I'm pretty sure." Ah, but this book was written in 1978, when $165,000 was worth $496,000 of 2008 dollars. That's a lot of money even in Cali.

The point, dear readers, is that most people feel like they are stretching to get by on their income. But since there is such a huge range of incomes in the US and A, it can't actually be the income that causes this. Someone who lives above his means is likely to do so whether his income is $15,000 or $150,000. And someone who stays under her budget will manage to do so at a range of incomes as well. So if you're struggling to make do on your salary, odds are that getting more money won't solve the problem.

Or to paraphrase Andy again, since I don't have his book in front of me to plagiarize: $20,000 earned, $19,000 spent = happiness. $19,000 earned, $20,000 spent = misery.

Monday, December 31, 2007

Loose Ends, Year Ends

Many weeks ago, I posed a couple of questions related to our potential move to London. One question was "in what currency we should want our compensation to be" and the other was "what should we do with our condo"?

Seeing as how we have decided, for the moment, not to cross the Atlantic (nor to take the longer route across the Pacific and through Eurasia), and because I enjoyed toying with you as I allowed the suspense to build, there was no urgency in answering them. But since I don't want to have to write a post that begins "Back in 2007...", I'll attempt to close them out now.

To answer the first question -- Would it make more sense to take jobs that paid in dollars or pounds? -- there were a couple things I took into consideration.

Can I predict which way the dollar is going to move against the pound in the next two years?

Of course if I could predict which way the currency markets would move in the next two years then it's a no brainer. In fact, it would be time for a complete reallocation of my investments. Of course, I can't, and anyone who says they can is probably one of the three quarters or so of Americans who considers themselves "above average". Predicting currency markets is notoriously difficult, and anyone who could do it with a lot of accuracy should be quite a bit wealthier than I am.

How much of our total salaries would we spend while we were over there? Would we be able to save a significant chunk of our income?

This is important, because what we earn will go to two purposes -- our living expenses, and our savings. By matching the portion of income that will go to living expenses while in London to the Pound, we'd reduce variability in our effective expenses. That's desirable...

Where do we plan to retire, and what type of currency would we need to finance it?

However, our retirement is much more likely to occur in the US than in London, so getting the portion of our income that will go to savings in dollars, we reduce variability in our retirement savings. That's desirable as well. Retiring in a third location (such as Mexico) would further complicate things, since having a diversified portfolio of currencies might actually reduce total variance the most. But we don't want to get too cute, and it makes sense to think that we'd want to keep our retirement savings consolidated in dollars.

If we assume that one of our salaries would cover our expenses there and the other would go into savings (a big assumption, but a worthy goal), then the optimal solution would be to receive the "spending" salary in Pounds and the "savings" salary in Dollars.

The second question -- what should we do with our condo -- is a little tougher to answer, because it requires math and stuff, but not that tough to set up. The mistake I've heard a lot of people make lately is this one: "It's a really bad time to sell... my property value is down 15% from a year ago, so I'm going to wait for it to come back up." Sound familiar? The problem with that is that it completely ignores the opportunity cost (and probably many other costs) of owning a house or condo.

The "opportunity" part of the opportunity cost is what you'd do with the money you could get if you sold the property. To make the math easy, let's assume my condo was worth $500,000 a year ago, and is worth $400,000 today (if you just spit on your screen, we'd like to welcome you to Southern California). And to further make the math easy, let's assume I have a $300,000 mortgage, so I have $100,000 in equity which I can turn into $76,000 in cash after real estate agent commissions (6% on $400k). These numbers are not real but should suffice for this illustration. Investing that $76k in an index fund or something, I should expect to make about $11k over the next two years (before tax) if I get a 7% return.

Alternatively, I can keep the condo and rent it out for the next two years. Let's set aside property value appreciation for a moment and treat it as a straight exercise of earnings net expenses. For a $400k condo in my area, I should be able to get about $2,000 per month in rent. As a landlord, you should expect a vacancy rate of between 5% and 10%, so let's say I get that rent for 11 of 12 months, for a topline revenue of $22k per year. From that, we must subtract the following expenses:
- association fees of $3,600
- only the interest portion of my mortgage (not principle since that's roughly the same as putting money in a savings account), which would be about $17,000 per year on a $300k mortgage at 6%.
- property taxes of about $5,000 (1.25%)
- other expenses of about $2,000 (plumbers, repairs, carpeting, paint,etc... a half of a percent of property value is very low but the association fees cover a lot of this)
- insurance... zero in my case, as the association fees cover this already
- property management: one month's rent plus 10% of rents. $4,300. Ouch. We would need this since we'd be abroad. You could avoid this fee, but then you'd have a brand new second job as a landlord, so it wouldn't really be fair to compare it to the passive investment of the equity you could get.

So that's a total of about 32,000 in expenses on revenues of $23,000 per year. I'd be underwater about $11,000 per year, or $22,000 for the two years I'd be gone. The alternative, you'll recall, is gaining about $11,000 over the same period.

So now the next question is... will the increase in property value (by itself, since we didn't count principle payments as a cost either) generate $33,000 (real cost plus opportunity cost) or more over the next two years? That's about 4% appreciation (on the initial $400k) per year. Normally, you could answer yes, but I wouldn't bet on it for the next two or even five years.

So for me, the answer is a big resounding "No, thanks. I'll just take whatever someone is willing to pay me for it now." Even if the value has dropped staggeringly in the last year, that has no bearing unless I think that that makes appreciation in the next couple years more or less likely.

"But what about the tax benefits?", you ask, as people so often do when talking about real estate. Simple - there are none. Once you go from living in your home to being a landlord, you lose this benefit. If you were net positive on the income net expense equation, then the tax benefit is that you'd get only get taxed on the net income instead of the total rents.

"But what if you consider a time horizon of more than two years?" You're welcome to do that. But be sure to factor in that once you've been out of your house for three years [corrected--thanks, commenter], you'll lose the best tax break in America - the ability to sell your home without paying capital gains taxes. If you're already underwater, or nearly so, this may not be a concern.

So there you have it - if we were moving to London we'd sell our condo and try to diversify our income into two different currencies. But we're not. So we won't. This entire post was for your benefit.

I hope you'll agree that I have successfully concluded my 2007 deliverables, and we can move on to new business in 2008.

Happy New Years.

Monday, November 26, 2007

Adsense Vs. May Mer Most

[Note: This post was originally uploaded on Oct 7, 2006.]

You'll notice I don't use Adsense on this blog... an odd omission considering my overwhelming appreciation for financial compensation. I've actually used Adsense before a couple times, once on a blog and once on a failed Amazon affiliate site focused on language products. In both cases, the income I made with Adsense was not really worth my time.

As good as Google is - and they are very good - it's just not that easy to make people want to click on ads. Google really tries to make the ads specifically relevant to the page they're on, but you only get paid if people click on the ads. Adsense is really geared towards benefiting elite bloggers who can generate thousands of visitors per day.

That's why the

Monday, Nov 26, 2007: Attention, we interrupt this post with a special announcement. The Google empire has decided, in their infinite wisdom, that certain methods of monetizing blog posts that compete with Adsense are bad news. Even naming the site, which rhymes with May Mer Most, could lead to good hard deGoogling of your site until the only evidence of your previous PageRank(tm) is a gaping hole and a light sheen of santorum.

Now I don't use Adsense, and I haven't posted anything on May Mer Most in a a good long time -- mostly because I just don't have time. But Google is by definition not evil, and if they don't like May Mer Most then neither do I. I mean, how could you side with evil against not evil? I'm sorry Google. Forgive me my trespasses, as I forgive those who have trespassed against me? Lead me not into temptation, and deliver me from evil. For thine is the kingdom, and the power, and the glory, forever and ever.

We now return you to your regularly scheduled blog post.

May Mer Most's paid blogging works better for me. The ad is, by definition, relevant to your content, because the ad is the content. Given that, and the fact that the links have value in and of themselves, May Mer Most can afford to pay the blogger whether people click the links or not. I've only been using the service a short while, but since I started I've found it's much easier to make money. At around $15 per day (for a few minutes work that I enjoy) it's not making me rich, but it's certainly helping with the car payment.

Saturday, November 17, 2007

How Much Does a Rolex Cost? How about a Mac?

I've got a few friends who own actual, honest to goodness Rolex watches. Now, cost aside, I'm about as likely to wear a Rolex as I am to drive a Corvette. A Rolex may be a great watch, but I tend to believe people wear them more for what it says about them than as a great timepiece. If I wanted my watch to say something about me, it would probably be the opposite of what a Rolex says. To me, a Rolex says I've got six thousand dollars with which I've nothing better to do. It probably goes without saying that I never expected to learn anything valuable about personal finance from a Rolex wearer. But I did.

J is a sales dude, and ostentatious displays of wealth are part of his schtick. Tormenting J is a favorite past-time of mine, so I'm sure I made some snarky remark about how I'd rather retire a few months earlier than own a nice watch. J pointed out that he had bought the watch used and, because a Rolex retains its value, he'd likely sell it for close to what he paid for it in a couple of years. Assuming, for simplicity's sake, that the transaction costs are not a factor then J's cost of owning the watch is his cost of capital (k). On a $5,000 watch, that works out to about $30 per month or so. That's not nothing, but it's probably a no-brainer for a guy who's livelihood depends in part on the appearance of success.

I'm sure I sat slack-jawed as he explained this, because I'm a bad multitasker and I was too busy having an epiphany to close my mouth. It should have already been obvious to me that you should consider resale value in the cost of an item, but I sure as hell wasn't doing it in most situations.

Since then, I've seen numerous examples of this principle in action. I've got a film-maker friend who's an ebay power-seller, and he financed an entire movie paying little more than ebay shipping costs. First he bought the high-end cameras he needed (he actually made money on the cameras by modifying them in a way that made them equivalent to more expensive cameras), then returned them to get the money to buy post production equipment, editing software, etc.

And today, I saw an article that used the same concept to explain that a Mac is actually cheaper than a PC. Since I'm in the market for a Mac but really put-off by the price, this was another great reminder that the price of an item is only the starting point for calculating cost.

Friday, November 09, 2007

Financial Koans, Anglo Style

So I haven't posted anything in 5 months. I've been busy. What? It's not like you've been checking back daily.

Anyway, The V-Train and I are contemplating a couple-year stint in London, home of the $20 Burrito (I'm sure it's delicious). So here are a couple of financial questions I've been noodling over. I'll give my thoughts on them later - but first I thought I'd throw them out there for my vast reader base to do their own unbiased noodling.

Question the first - Would it make more sense for us each to take a job that gets paid in pounds, or one of us to get paid in pounds and one in dollars (assuming the total comp will be the same either way at today's exchange rate, and that each of us gets paid roughly the same amount)? What should be the considerations?

Question the second - With the housing market down significantly since last year, would it make more sense to sell our condo in a down market, or rent it out and wait for prices to come back up? Does it matter how much equity we have? What if we were upside down? We live the greater metro Los Angeles area. Assume there's no expat package that helps us with either option.

I await what's certain to be a flood of responses.

[Go to part II of this post.]

Tuesday, June 19, 2007

A Contrarian on Interest Only ARMs

So let's assume you've got full use of your cognitive facilities, and actually get the best loan for which you qualify. But should it be a conventional, ARM, or what? Obviously not an interest-only ARM... as we've already assumed you're not stupid.

But wait... here's a contrarian view. Everyday Finance rightly points out that you don't pay down much principle in the first several years of a loan. And if you're not planning on living in your home more than the time period of the interest-only rate, then you haven't lost much. At 6% interest, in the first 10 years of a 30 year loan, you'd pay down less than 17% of your principle, or about $49,000 on $300,000. So from a risk perspective, it's not as bad as people make it out to be. And if you don't blow that extra money on hookers and coke, you can actually get better returns.

If you've got a low low interest rate (assuming taking interest only doesn't increase your rate), you're probably better off investing your extra cash elsewhere like, say, the stock market. Then instead of $49,000 in equity you could have $55,000 in stock. Hell, I do this with my 1.9% APR car loan right now. Lexus Financial Services is investing in Powershares Water Resources (PHO) on my behalf, and I'd never pay off that loan if I didn't have to.

Don't quite agree with everything in Everyday Finance's analysis (for example, paying down principle is not the same as giving the bank free money) but the key point remains - don't be a sheeple and blindly accept advice from Money Magazine without thinking it through on your own.

SubPrime by Choice

One of the key assumptions of neoclassical economics, one that colors theories and analysis put forth by its practitioners, is that people act in their own rational self interest. How, then, can they explain this report from Fannie Mae that half of the sub-prime loans they purchased in 2005 were held by borrowers that could have qualified for prime loans?

Let's pause for a second to digest that.

The difference between prime and sub-prime loans could be up to 3 percentage points. Even if it's just two points, you're looking at hundreds of dollars a month on your standard Los Angeles mortgage.

So who doesn't shop around when they are taking out a $300,000 loan? Rational people for whom the the several hundred dollars a month is worth less than the time it would take to find a better loan? I'm pretty sure that The V-Train's meddlesome cousin (a former sub-prime loan underwriter) has something to do with this.

Or perhaps people act in their own self interest only if they can recognize what their interests are. Rational, but retarded.

Thursday, May 31, 2007

Test drive of Yodlee

So I've been hearing a little about Yodlee, which offers an account aggregation service. That is to say, they will track all of your accounts - bank, mortgage, credit cards, stock, 401k, student loans, etc on one page, as well as offering billpay services and other benefits, all for the low low price of free.

My first thought is that it solves a real life pain point - and the plusses would be a godsend. That thought was immediately followed by another - if someone got ahold of your Yodlee account, and that account has full access to every other account you hold, you could be up a very deep creek without a paddle.

Still, after a little research, I found that Yodlee has a partnership with HSBC, with which I already have some accounts. HSBC in general has some good security methods, so I went ahead and took the plunge and signed up for their EasyView service.

I did take some efforts to protect myself for now. I chose a unique password that's more complex than the one I normally use. I also left my largest accounts - those holding my stocks and 401k - off for now. I did include all of my mortgage info because, while those accounts are large too, there isn't as much someone could do to screw me up by accessing my mortgages online.

So what did I think? I loved it as much as I thought I would. Accounts like my student loans, that I access rarely and have to look up my account information anytime I want to see them, come up as part of the dashboard, just as easily as my bank accounts and credit card info. Bonus - it computes your net worth for you based on the assets and liabilities in it.

There were a few accounts I couldn't get it to synch with - my car loan, for example - but it gives you a method for manually entering the information. I'll just have to update it periodically as I make payments. I've also heard they have partnered with Zillow, so soon it may go out and automatically get the value of my real estate assets and include that as part of my net worth. I've done it manually for now, because having the liabilities listed without the assets was making me cranky.

Overall, I'm very happy and plan to keep using it. I'll wait a while to decide whether to add any login information for my most sensitive accounts. Your risk tolerance may vary.

Wednesday, May 02, 2007

Back from hiatus

Well, I'm back from my honeymoon. The last month and change has been consumed with preparation and all kinds of things that are generally incompatible with the advice of personal finance professionals. Oh well, I figure as long as we did everything with our eyes wide open, and know exactly where everything fits in my master plan to retire very young, it's all right.

Anywho, now that that craziness is done, things should get back to normal, which means more regular posts here and elsewhere.

Saturday, April 28, 2007

Put back that airplane pillow

Maybe I'm naive, but somehow I assumed that airlines replaced the pillow cases on those little white pillows after every flight. Not so much, it turns out. Airlines mostly use the time at the gate to re-fold the blankets and pick up trash. Ugh.

On another note, I recently bought one of those inflatable neck pillows, and it's really nice. Folds up to about the size of my wallet, and it's really comfortable if I only inflate it halfway.

Friday, April 27, 2007

AMT Reform Finally Here?

I did not get hit with the AMT this year, though I was pretty concerned that I would. It's tough to know if you're going to get hit without doing your taxes, and what with other stuff going on, the taxes weren't finished until late. I had a couple of friends that got nailed with it this year. One owed around $10k more than they thought they'd owe, and the other got hit with a surprise, totally unexpected $30k shortfall. Wiped out his savings and had to put off plans to buy a house. Ouch. I breathed a sight of relief when my accountant finally told me I was due a refund.

I am reasonably certain I'm going to get hit in 2007 if there's no change. I got married this year, and apparently that's not doing me any favors tax-wise. One of the effects of my AMT limbo is that I've been completely paralyzed on certain financial decisions. My financial portfolio is very heavily weighted to a couple of investments, and I'd like to diversify by rebalancing. Unfortunately, with this AMT thing hanging over my head I was concerned that the capital gains from my rebalance would reduce my AMT exemption, thus effectivly getting taxed at 22% rather than the standard 15% long term rate.

The Dems have apparently taken up the AMT mantle this year (risky, since many people, like my friend, don't know they're about to get hit with it and will thus never know that the Dems saved them from it). AMT reform presents all kinds of problems (namely, how are they going to make up the shortfall), but it looks like the Dems have finally agreed on a strategy to protect folks who make less than $250k per year. I'm waiting with bated breath.

Sunday, March 18, 2007

Real Estate Prices Explained

This article from today's New York Times Magazine is one of the most straightforward explanations I've seen for the factors impacting real estate prices.

The long and the short of it - it's not entirely appropriate to think of real estate as a completely different type of asset class, immune to the vagaries of bubbles and speculation.

Shiller’s gloominess has been widely noted. He thinks we are under the spell of that familiar goblin, mass psychology. Lemming-like, people are buying homes merely because they expect that prices will rise. This certainly holds for speculators, like the manager of a rental-car agency at the Tampa airport who confessed to a customer (an economist) that he owned no fewer than 20 condominiums. And it explains some of the impulse to buy second homes, which are closer to being tradable assets than a primary residence is.

But neither is it appropriate to think of it as being the same. Real estate is much stickier. Quoth The Times:

This is the problem I have with the real-estate-equals-dot-com argument. Most homeowners buy to have a place to live. If prices fall, they react precisely unlike stock traders; rather than bail out, they stay put longer. Every share of Cisco may be for sale every day, but every house is not. Case, Shiller’s partner, tracked 628 home listings in the Boston area during 2006, as prices began to fall. After four months, the majority remained unsold, but the sellers lowered their asking prices by only 3 to 4 percent.

But what I liked most about this article was it's treatment about the value of leverage in real estate investing.

Suppose the stock market did rise 10 percent; after a year you would be up $5,000. Whereas the gain on your home would be 5 percent over the entire purchase price — or $11,000. Over 10 years the gap becomes huge — not to mention over 20 or 30 years. This is the little guy’s (and also Donald Trump’s) trick for accumulating equity: leverage.

It then goes on to talk about how leverage is theoretically practicable for investments in other asset classes, but the truth is that the lending rules for real estate are much more forgiving. If stock prices go down and you are leveraged, you're forced to cover immediately. If that held true with real estate, as the author points out, very few of us would be homeowners. Overall, one of the better articles I've read on this subject.

Saturday, March 10, 2007

The Bubbleversary

On March 9, 2000, the NASDAQ stock index hit 5048.62. On March 10, 2000, it began a downward slide from which it has never recovered. On Friday, the NASDAQ closed at 2,387.55, which is a great improvement over 1300 where it sat in September of 2002.

The NASDAQ increased over 500% in the five years leading up to 2000. It had pretty consistently returned 60-70% every five years for the several five year periods before that. There was a lot of talk at the time that things were "fundamentally different". Now it really only matters that large institutional investors thought that, because they move the market. Individual investors really don't have a lot of power to nudge it.

But even if they didn't have market moving power, individuals could still get themselves in a lot of trouble. I remember people who had no business investing in stocks, talking crazy. I remember hearing people say that a stock sounded cheap because it was priced at $10 per share, without any regard for the number of shares outstanding or what that implied about the value of the company. Much less did they try to evaluate the profit the company might return in the future, and what share of that profit their $10 got them.

I remember people buying stock because it was about to split, and they were sure people would buy more stock after it split, driving the price up. They didn't consider that a) a split doesn't change the value of the company and b) even if it did, we ALL knew the stock was splitting, and if it was really that simple a lot of people would have beaten them to the punch.

Anyway, happy anniversary. Did we learn anything? I don't think so. The way I've heard people talk about real estate over the last five years, I'm pretty sure we did the same damned thing just a couple of years later -- people who knew nothing about real estate talking about it "knowingly" like they were Conrad Hilton. Many people think the reckoning has come, but it certainly hasn't felt like a reckoning to me. NASDAQ 2000-2002: now that was a reckoning.

Saturday, February 10, 2007

How to hide stuff from burglars

Good post from Personal Finance Advice on how to hide stuff from burglars. They interviewed a burglar who pointed out that if you hide stuff too well, the burglar will tear your place apart looking for your valuables, causing damage that could be even costlier than the theft itself. Since they want to get out as quickly as possible with your valuables, it suggests helping them do that. By hiding a "stash" where it will be found quickly, you may convince the burglar that they've completed their search, and their desire to get out quickly may become the next highest priority. Interesting take.

Free Language Lessons!

The Foreign Service Institute collects language courses developed by the U.S. Government. Since you own part of the U.S. Government, you therefore own an equal share in anything they develop. You've already paid for these, so there's no need to pay again. Their options include Vietnamese, Chinese, French, Italian, and Spanish. Great stuff.

Friday, January 05, 2007

Stupid Ways to Lose Money

Some forum posters on have been discussing stupid ways they lost money. I'd have to think long and hard to figure out my worst, but suffice it to say that over the course of my life I've lost five figures easy through really stupid stuff. Here are some examples that leap to mind:

- Countless times have I failed to send in rebates, or failed to return non-fitting articles of clothing within the return period. Being absent minded is costly.

- Losing receipts for work expenses is another of my favorite ways to blow money. Being disorganized is costly.

- My favorite: I went shopping for a new wallet with V-Train, and thought it would be a good idea to test containment ability by stuffing TWO HUNDRED DOLLARS cash into the wallet I was considering purchasing, then seeing how it felt. Eventually I decided not to purchase the wallet, and put it back. Hilarity did not ensue. Being retarded is costly.

I thought reading other people's stories would make me feel better, but it made me feel worse because my examples are dumber.

Wednesday, January 03, 2007

Manhattan Real Estate Still Bubbling

Real estate prices aren't going down everywhere. According to the Associated Press, median prices for Manhattan apartments have risen 9% in 2006, and the mean price is up 5% over the fourth quarter of '05. The median Manhattan apartment went for an astounding $760,000 in Q4 of '06, 4.27 times the median home price in Boise, and making me wish my real estate holdings were on the other coast.

On the Upper West Side, large apartments are up 48% over a year ago. Condos stayed flat, and Co-Ops went up 3%: impressive when most of the country is experiencing, if not a burst, at least a deflation.

There are no signs of slowing in '07.

Monday, January 01, 2007

Points Don't Pay

A new study coauthored by Penn State and Freddie Mac shows that an overwhelming majority of the time, homebuyers buy more points than they should. A point, or 1% of the cost of the mortgage, lowers your interest rate a specified amount. The cost-benefit analysis simply entails figuring out how many months you'd have to have a the lower interest rate (and lower payment) to make up for the money you spent on the point. Once you buy the points, if you hold the mortgage for less than that breakeven period, you lost money by buying the points. If you hold it longer, your points were positive ROI.

The study showed that only 1.4% of borrowers who bought points ended up holding the mortgage long enough to make the points ROI positive. Of the people who didn't buy points, only 1.5% of people would have been better off purchasing them.

This study shows a couple of things, I think (even assuming the results are skewed by decreasing interest rates that caused a lot of unexpected refinancing). One: people may overestimate how long they're going to keep their mortgages. But a second likely explanation is that people probably don't bother to do the math. For whatever reason, they may just think that lowering your interest rate is worth more than it really is. Important stuff to keep in mind for the next time you look at a home purchase.

PMI Now Tax Deductible!

Wish this had been in place 10 years ago. For mortgages originating in 2007 or later, Private Mortgage Insurance is now tax deductible! Oh, happy day. This effectively cuts the cost of PMI by a third to a half, dramatically changing the balance between accepting PMI, or taking out a 10% piggyback loan at a high interest rate.

I took the piggyback on my last mortgage, and am paying 8.5% interest (effectively 5% or so after tax deduction) on that piece, and that could go even higher since it's a variable rate. If this had been in effect, I'd probably have gone with the PMI.

Of course, you could avoid all of this with a 20% downpayment, but then you'd lose some of the wonderful power of leverage.

Getting Started on the Right Foot

CNN Money gives some sage advice about the right way to ingratiate yourself with your new colleagues when you start a new job...

- keep your good ideas to yourself for a bit, until your coworkers' guard comes down a bit
- be respectful and subdued, not their best friend
- learn the culture, but don't come off as nosy
- find a way to work with, and impress, influential people

The article gives much more detail on the whys and hows, and makes some very solid points.

Sunday, December 31, 2006

25 Rules to Grow Rich By

To ring in the New Year, CNN Money has posted 25 Rules to Grow Rich By. They include nuggets like which home upgrades pay for themselves, how to select the right deductible for your insurance, and how much money you'll need to retire.

Rule # 26: Feel free to end your article title in a preposition if the title is otherwise snappy and will generate site traffic and the accompanying advertising dollars.

Expense vs. Waste

I just re-read Andrew Tobias' My Vast Fortune. This book isn't nearly as good as his seminal The Only Investment Guide You'll Ever Need (it really is), but it still contains some interesting nuggets. It was the first book that helped me understand that if the US government maintained a budget deficit every year from now until eternity, it did not necessarily mean we'd eventually go bankrupt (as long as the GDP grows at a faster percentage rate than the deficit).

Anywho, the interesting nugget yesterday was Tobias' view on waste. Getting a parking ticket, says he, is not a waste. You're just transferring money from your account to the government's but that money doesn't disappear and the government will spend it on something (probably something wasteful, but that's not his point). So really, you can't feel too bad about a parking ticket. Think of it as a forced donation to charity. Digging for gold, however, is a waste. The world already has all of the gold that it requires for industrial uses, and it's value for other uses depends upon it's scarcity as a precious metal. Digging for gold expends resources (fuel, labor, parts) and reduces the scarcity of the existing gold, hence it is wasteful.

And I guess by that logic, I was incredibly wasteful on Friday when I ate three quarters of a pizza, and subsequently worked out for 45 minutes in a fit of remorse.

Tuesday, December 26, 2006

More on Commercial Real Estate

I posted recently about the potential for commercial real estate in Bentonville, Arkansas. Today, a free article from the Wall Street Journal on real estate investors switching into commercial or multi-unit residential investing. The reason is that cash flow is now trumping anticipated appreciation as the key component of the investment. Commercial and multi-unit residentials offer much better cash flow, because they don't have the same speculative inflation priced in. This makes sense, since land appreciates much faster than the buildings themselves (since land is scarce, but buildings can be, well, built).

One notable nugget in the article:

The situation is bleaker for those buying homes and condos as an investment, says Mr. Liang. "They should have very limited expectations on appreciation going forward -- probably 0% to 3% annually for the next five years," he says.

That speaks to why I love real estate as a long term investment. Say properties appreciate 2% per year. If you bought the property on a 90% mortgage (you put 10% down), you're getting a 20% return on your invested money (before expenses, which can be significant). Has there ever been a significant period of time where real estate didn't appreciate a few percent a year? If you ride it out, it provides what I think are higher and safer returns than other types of investments. And in the long term, you can get some great periods of appreciation, like we've had recently. Get someone else to pay your mortgage, and the appreciation will come eventually, turning your $20,000 investment into $200,000 of equity.

The Joy of Refi

The heyday of mortgage refinance may be waning, but it isn't gone. About a year and a half ago, with mortgage rates at historic lows, I refinanced a rental property I own. This is significant: since it used to be owner occupied, I had a pretty good rate relative to the none-owner occupied mortgages that were available to me after I moved out. When I refinanced, rates had finally dropped enough to where the non-owner occupied refi rates would beat my original owner-occupied rate. In order to ensure that I was getting a good deal (it's difficult to make an apples to apples comparison when you're restarting your 30 year clock after a number of years) I took a "no closing costs mortgage", so then I only needed to ensure that the rate offered was lower than my previous 7% rate. As an added bonus, I got the Private Mortgage Insurance (PMI) eliminated at the same time.

The result was that I have several hundred dollars a month back in my pocket, which makes life a lot easier and made it easier for me to finance the monthly payments on my new residential property.

While rates are going up, mortgage refinancing still presents opportunities to save money. For example, a lot of people took adjustable rate mortgages a few years ago that could be getting ready to sting them. If they've gained some appreciation on their property, they could lose the PMI and lock in a rate that, while not the best ever, could beat the heck out of adjustable rates kicking in. If you took an ARM with the expectation that you'd be selling, and have changed your mind, refi could be a real life-saver.

Your Money Is Not Safe at Washington Mutual

Yes, it's a dramatic title for a post. Got your attention? Good.

I'm currently in the process of taking all of my money out of Washington Mutual and moving it to Chase. This is actually a pretty difficult process... with auto billpay, direct deposit, and what not, there is a significant transactional friction involved in changing banks. But I'm still ending my 10 year relationship with Washington Mutual based on what happened to my boss. It's important to note this didn't happen to me... but I was present for parts of it from the beginning, and I absolutely believe that it happened as told to my by my boss.

A couple months ago, my boss ("G") noticed that there was a $2,000 withdrawal from his bank account that he didn't recall having made. By chance, he caught it within a day or two of the withdrawal having been made. After some time discussing it with his wife, he realized that the only explanation was that it was a fraudulent withdrawal. He called Washington Mutual and headed down there with his wife the following morning, by which point another fraudulent withdrawal had been made from second account he had with Washington Mutual. The bank explained that in most cases of identity theft, it was a family member, so he should check around to see if it could be a family member in this case. In the meantime, he asked Washington Mutual to put a hold on ALL his accounts, and they said they would.

Later that morning, I accompanied G to the police station to file a report. There was a lot to find out, but at least he caught it early. Then something happened that caused me, him, and everyone who was aware of what was going on, lose faith in Washington Mutual. Later that day, there was an additional withdrawal. He called and screamed at the bank because they had promised to put a hold, or a flag, or something that should prevent the fraudulent withdrawals from continuing. A day later... another withdrawal. At this point, he had no choice but to close his accounts and withdraw his money, because he had been hit for five figures, and it was clear that Washington Mutual wasn't interested in protecting the money.

After yelling at the bank manager again, it came out that they didn't want to put a hold on the account because they figured it was probably a family member/forgotten withdrawal. They explained that holds are very inconvenient for the customer, so they decided not to implement it. Because they basically did not believe him about the fraud, the losses from his accounts were far greater than if they had acted when they said they would.

Will he get the money back from WaMu? Surely he will. But having 5 figures disappear from your accounts for even a short time is a major inconvenience at best, and could have severe financial consequences (late mortgage payments, etc) at worst. WaMu basically treated him like he was the criminal, and showed an appalling lack of concern for the security of his money.

Given that WaMu has a crappy network and crappy interest rates, the ONLY reason to use them is their supposedly superior customer service. Without that, they're worthless. I'm going with Chase because I like the international presence, but there are plenty of other banking options that are more convenient than WaMu for various reasons.

Get it together, WaMu. Identity theft is no joke.

Tuesday, December 19, 2006

Skate to Where the Puck is Going

One of the greatest real estate booms in the last twenty years has to have been in Orange County, a big part of which is occupied by the Vietnamese community. Immigrants want to live near each other, and as they've gained prosperity (through their entrepreneurial culture, mostly) they've driven prices in Little Saigon and the surrounding areas ever higher. I've got my eyes open for the next great immigrant influx.

In the meantime, The V Train was in Bentonville, AR last week and noted that the not-exactly-new trend of companies stationing employees, either temporarily or permanently, near WalMart headquarters was yielding some interesting and predictable effects. Yes, a whole slew of new hotel developments and corporate housing have started to go up in this once small town. But there are still no big-city type amenities (restaurants open late, e.g.) catering to the army of business travelers that shows up there every Monday.

You could capitalize on this by moving there and opening a business yourself, or you could invest in some commercial real-estate and take advantage of the "pull-marketing" effect to attract lessees.

Since I don't know jack about Bentonville or commercial real-estate, you can have that little golden nugget for free.

Tuesday, November 28, 2006

Home Prices Decline 3.5% - It's a big deal

The median price of a home in the US fell by 3.5% over last year's number, to $221,000: the biggest decline on record. If 3.5% doesn't sound like a lot to you, remember that most people buy homes on leverage, i.e. mortgages.

Suppose a year ago you bought a median priced home for $229,000. You put 10% down, so you invested $22,900 of your own cash money. Now suppose the price declined by about 3.5% to $221,000. You've just lost $8,000 of your $22,900, or 35% of your investment! If you turn around and sell it tomorrow because you're afraid the market will continue to decline you'll probably incur transaction fees ranging around 6% (real estate agents, escrow fees, etc), which would wipe out your investment completely. But if you don't turn around and sell it tomorrow, and we have another bad year or two, you could soon owe the bank more money than your house is worth, even though you put down 10% of the money yourself.

And with prime at over 8%, let's hope you didn't buy on a variable rate mortgage, because your payments could soon jack up without giving you the benefit of any additional equity.

Rising interest rates mean some people won't be able to make their payments. Declining prices will mean some people won't be able to solve their payment problem by selling. Hang tight, there's going to be a shakeout.

Wednesday, November 15, 2006

Social ROI

I posted recently about Charity ROI: How do you get the most bang for your charity buck? Tough to find, but I recently stumbled across a blog called Social ROI. It's a charitable entrepreneurship blog. It isn't exactly what I was talking about, but it's definitely got a business bent, and that's what it takes to get the best bang for your charitable buck.

Microsoft StickyKeys

Not sure what the difference is between Microsoft StickyKeys and Microsoft FilterKeys, but I know when I hold down the shift key for too long, it gets stuck on and there's no way to prevent it. This blog posting has advice for how to turn off Microsoft StickyKeys.

Sunday, October 15, 2006

Sushi Pillows!

Now why didn't I think of this?!

Sushi dreamin'

Fantasy Football And The Trojans

I hadn't played Fantasy Football for years, but as a Season Ticket holder for the USC Trojans
I've had the great pleasure of watching a number of players graduate into the NFL. These include, of course, Reggie with the Saints, Matt with the Arizona Cardinals, as well as Lendale White with the Titans, Big Mike Williams with the Lions (not the greatest success story, but keep the faith), and Troy Palomalu with the Steelers.

So finally, I'm back into it. I decided to field an All-Trojan team, and I expect that within two years they are going to be an unstoppable juggernaut of whip-ass. Any challengers?

Friday, October 13, 2006

Top Rated Charities

I spoke earlier about maximizing the value of your charitable donations by choosing your charities, wisely. Charity Watch is an organization that helps to do that by ranking charities based on how much of what they take in is spent on directly helping people, vs. how much is used in running the charity or in soliciting donations.

That's an imperfect measure, of course. Just giving every penny that comes in directly to the targeted beneficiaries is not necessarily the best way to do good works. Some management can make the charity more effective. And investing in driving future donations is useful to, though in many cases non-profit groups are just competing against each other for peoples' hard earned dough. But it is a good jumping-off point when trying to figure out a group that has come to you, hat in hand.

Teen Crashes Car to Ward Off Unbelted Carjacker

An Iowa teen intentionally swerved his car into oncoming traffic to escape a carjacker who was holding him at gunpoint. The carjacker had grown angry after making the teen drive to two ATMs, neither of which met the carjacker's standards. He threatened to kill the boy.

The young man, after realizing that he was wearing a seatbelt and the carjacker wasn't, decided to crash his car into an oncoming SUV. The driver of the SUV was not injured, but the carjacker was knocked unconscious and arrested at the scene.

More Charity for Your Money

Every year, I receive dozens of solicitations for charity from police organizations, homeless shelters, animal services and zoos, schools, you name it. So how do I decide which charities to give to?

I have what I suppose are unusual criteria... As a businessman, I like to ask the question of which charity will have the greatest "return". I tend to believe that Americans are better off than other people in the world, so I consider it a poor use of my resources to give to charities such as "Make a Wish", which aim to bring a little more joy into the life of dying children who are already well-off by world standards. While I understand the sentiment, I've seen true abject poverty and misery abroad, and I'd rather feed some kid in the Philippines for the rest of his life than send a kid in Minnesota with Leukemia to Disneyland.

But that's not enough... while undoubtedly "Save the Children" is a great charity, how can my money have the most impact? I've read about charities that offer entrepeneurial "microloans" which follow the "teach a man to fish" philosophy, and those seem promising. Has anyone bothered to rank charities in terms of a charitable ROI? I'd be really interested in seeing that. I'm not a rich man, and I have a limited amount to give, so it's important to me that the money go where it will have the greatest impact. Ideas appreciated.

Monday, October 09, 2006

New David Allen Productivity Podcast

I posted a couple days ago about how David Allen's book "Getting Things Done" has really changed my work-life. Now David Allen has hooked up with productivity blog/board/wiki 43 Folders to start a productivity Podcast. This sounds really interesting.

What a great idea! The basics of GTD can be laid out nicely in a book, but a lot of the most interesting stuff is bound to come in one-off questions that can be answered in a Podcast. The biggest barrier to really implementing a productivity system is consistency, and putting it in a Podcast encourages constant re-evaluation of your own progress.

Saturday, October 07, 2006

Keeping Up With the Joneses

From MSN, a cautionary tale about what can happen when you try to keep up with friends who make more money than you. To paraphrase Andrew Tobias in the best finance book I've ever read:

Earn $50,000, spend $45,000 = happiness.
Earn $45,000, spend $50,000 = misery.

Living in the UK

V Train and I recently visited London. V Train actually had a job offer their, so we thought we'd combine a scouting expedition to see if we'd like to live there with our annual vacation. In addition to meeting the folks who offered her the job, we hit Wimbledon on the day of the mens' finals (relax, it was just Henman Hill), tried Pimms cups, caught the Italian celebration of the world cup victory, took the Chunnel into Paris, and found a crappy Polish/Mexican restaurant selling a $20 burrito. (ouch)

The verdict? Well, we'll definitely will be moving over there sometime in the next two or three years... but not for this job. I have a couple other London opportunities coming up in the next few years, and she's going to wait for the right opportunity for her. We're going to need a long runway to pull it off, because the logistics look to be pretty sticky. For instance, did you know that you need a bank account to get an apartment, but you need an apartment to get a bank account in the UK? Those kind of things will drive you batty if you don't do your homework (and even if you do).

For now, it appears that V Train and I will be revisiting this idea often. Look us up in Kensington 5 years on! Pip pip, cheerio, and all that rubbish.

Google in Talks to Buy YouTube

According to the Motley Fool, Google is in talks with YouTube to purchase the video sharing site for $1.6 billion. This is not remotely surprising given how YouTube has handed Google their lunch ever since Google launched Google Video. Google's never caught up with YouTube and the way people use it as a networking site, launching celebrities like LonelyGirl15.

Since Google's sitting on $9.8 billion in cash, they can actually pull this off just by showing up at their San Mateo headquarters with some large, bulging suitcases.

Trojans, Bears, and Trick Plays

I just got back from the USC vs. Washington football game, which was much more of a nailbiter than I would have liked. I may be hoarse tomorrow from yelling through almost the entire fourth quarter. In the first quarter there was a neat fake field goal... Steve Smith sat on the sidelines just inches inbound like he was supposed to be off the field, and when they snapped the ball he was uncovered and untouched as third string quarterback Michael McDonald tossed him the ball near the endzone.

I got to watch the Bears take on Oregon after I got home, and the Ducks ran the exact.... same... play. Seems like they watched the game and figured they'd better use the play while the Bears maybe still hadn't seen the replay from the SC game. Worked ok, but they didn't make it into the endzone for some reason.

Meanwhile, I'm grateful for the win, Auburn lost to Arkansas (who was crushed by SC), and Tennesee are showing themselves to be one of the best teams in the country after beating Cal in the first game of the year. A good day to be an SC/Cal fan.

Friday, October 06, 2006

HP Execs charged with felonies

It's a tough time to be a big time corporate exec. The mood lately has been to send as many as possible to jail. And let's be honest: they've had it coming for a while. Cry me a river.

Patricia Dunn, the recently resigned HP CEO, was charged today with felonies related to her botched investgation of leaks coming from the HP Board. Four others were charged as well.

She was fed up with leaks, and probably was right in taking a stand against them but... the road to hell is paved with good intentions.

Oil Prices Continue to Drop

Oil prices have dropped to $60 per barrel from a summer high of $78. I talked about why a big drop might be coming down the pike in a previous post. In California, I haven't seen any gas prices that start with a 1 just yet, but some parts of the country are reporting that.

USA today, however, is skeptical that gas prices will continue to fall until the nationwide average hits the ones, but doesn't really offer any compelling arguments for why we might be at a gas price floor. I'm betting on that there will be continued decreases in fuel prices.

Review: David Allen's "Getting Things Done"

About 6 months ago, I picked up a copy of David Allen's "Getting Things Done" based on good word of mouth. At the time, I was disorganized to the point where I was bumping up against the Peter Principle, having been promoted to my level of incompetence. I had well over 1,200 e-mails in my inbox.

The main philosophy of the book is that disorganization creates a constant hum of mental stress. If you aren't absolutely positive that you have a system that will remind you of the things you need to do in time to do them, then your brain will struggle to hold on to them. Ever lay in bed at night thinking about all the stuff you need to do tomorrow, and thinking about how you'll remind yourself of those things? I did. Ever get out of bed because it pops into your head that you owed a deliverable today and forgot to send it? I did.

The book proposes an entire complicated system, but you can adopt it in simple form, as I did. I have since cleaned out my inbox. I have 2 "to do" folders (personal and work), 1 "for review" folder, and 1 "waiting on someone else" folder in my Outlook. I also have a ton of archival folders for things that aren't actionable. Every to-do I have gets converted into an e-mail, and I'm now confident that I have a full record of my to-dos that is accessible at any time. My inbox stays at zero. All e-mails either get put into one of my four action folders, deleted, or archived. If it's a thirty second to-do, then I just do it right away and then archive or delete. That's much easier to do when you don't have 1200 e-mails in your in-box. It's made a huge difference on my productivity.

There's a lot of other great stuff in there, some of which I'm doing, but that's the single thing that's made the greatest difference. I can't recommend the book highly enough, and I think it's going to be directly responsible for my next promotion.

Miracle Hiccup Cure!

Israeli doctors have developed a miracle hiccup cure you can try at home!

A 60-year-old man with acute pancreatitis developed persistent hiccups after insertion of a nasogastric tube. Removal of the latter did not terminate the hiccups which had also been treated with different drugs, and several manoeuvres were attempted, but with no success. Digital rectal massage was then performed resulting in abrupt cessation of the hiccups. Recurrence of the hiccups occurred several hours later, and again, they were terminated immediately with digital rectal massage. No other recurrences were observed. This is the second reported case associating cessation of intractable hiccups with digital rectal massage. We suggest that this manoeuvre should be considered in cases of intractable hiccups before proceeding with pharmacological agents.

Monday, October 02, 2006

Foley Scandal

If you haven't read the Foley IMs yet, you're missing out on a whole bunch of ewwwww. It turns out that while ABC was the first major network to break the story, they got it from an anonymous blogspot blog.

Looks like Hastert's in a bit of trouble now too. When the Washington Times is calling for Republican blood, you know someone screwed up bad.

Saturday, September 30, 2006

Sushi Etiquette

Here's a nice little list covering Sushi etiquette, with which most Americans probably aren't familiar. Some key items:

- Nigiri (a small piece of fish on a small bed of rice) should be eaten in one bite. But if the Sushi chef made it too big to pop in your mouth, don't worry about it.
- Don't mix wasabi into your soy-sauce dish. The chef puts what he considers to be the right amount of wasabi underneath the fish, and you can add a little more on top if you want. Wasabi soup is so gauche (but it's so good I do it anyway).
- Don't leave food on your plate at the Sushi bar. If you didn't want it, you shouln'ta ordered it.

Friday, September 29, 2006


I'm trying to watch the 1957 movie Tammy and the Bachelor on American Movie Classics, but I can't shake the nagging feeling that Leslie Nielsen's about to bust out with an 'I am serious, and don't call me Shirley" at any moment. It's like having the first five notes of Shave and a Haircut stuck in my head.

How about that? Such is the power of typecasting that I can't even watch a movie with Leslie Nielsen before he was Leslie Nielsen. Come to think of it, I have a hard time watching old clips of OJ playing football as well.

Wednesday, September 27, 2006

Dave and Julie: Saccharine Barfs

So there's this couple I know, Dave and Julie. And I swear, they're both cool individually. I mean, I think they are. Actually, I wouldn't know, since they're like joined at the hip and stuff.

Anyway, so we're at Dave's, getting ready to go out to dinner, and Dave's like totally wearing his Tivas. And as we're leaving, he's like "hey, maybe these sandals are a little too informal. Maybe I should put on something a little nicer." And Julie's like, "Oh, bubbie [she calls him bubbie for some reason, it's disgusting], you know you look beautiful no matter what you wear."

I've taken to wearing a cilice for just these situations. It distracts me enough to suppress my gag reflex.

Apparently, I'm not the only one who feels this way.

Sunday, September 24, 2006

Customer Service

I spent my birthday in a hotel in the Philippines, which isn't much fun at all. However, on the day of my birthday, as I made my way about the New World Renaissance Hotel in Makati, hotel staff who I didn't even know kept wishing me happy birthday as I passed them. The whole day culminated with the hotel staff surprising me by knocking on the door of my room with a birthday cake and a song. It was a nice little touch for this weary traveler.

It's so nice, in fact, that it outweighs any discomfort I may feel about everyone in the hotel knowing my personal business. It does make me wonder, though, about the other regulars in the hotel who treat the staff as if they don't exist, and engage in behaviors that they surely would want to couch in some kind of anonymity. Because, the hotel staff... They. Know. Everything.

The Portrayal of Tech in Films

I'm not exactly a techno-geek, though I suppose I know more than the average American. It's easy to mis-peg the average and bias it with your own knowledge, but trust me. There are plenty of people who think you can shut down a computer by turning off the monitor, etc, etc, etc, so I'm pretty sure that saying I'm above average isn't saying much at all.

Still, though, you have to wonder how people are willing to suspend disbelief that when movies do things that people with even a cursory understanding of technology have to realize doesn't make sense. It's a total Deux ex Machina for lazy scriptwriters, so you have to respect it when filmmakers at least make a valiant effort.

Gideontech has ranked the top ten worst portrayals of technology in film. Reading through it, I must say I'm not at all in accord with their list. I mean, really, how can you exclude Independance Day, in which Jeff Goldblum writes a virus in the universally destructive language of AppleScript to take down an alien computer system, about which he has no knowledge? And while Mission Impossible is right where it belongs, I think the biggest problem is that is internet search for "Job" instantly turned up relevant biblical references rather than, say,

But as I was preparing my formal letter of complaint, I realized that it is such a huge and pervasive problem, that most peoples' lists won't overlap much at all. It's so common for films to be so bad in this regard, that it's really tought to narrow it down. So kudos to Gideontech for at least trying to bring attention to the problem.

Please, filmmakers, is it really too much to ask that you hire a Tech Support Representative, Level 2, to give your script a once over before you turn on the camera? I hear you can get them pretty cheap in India.

Saturday, September 23, 2006

Brittingham may choke on someone else's vomit

In case you haven't been paying attention to USC football (I know, of course you have, but humor me), the fullback position is cursed this year. First, starter Brandon Hancock went out for the season (and, probably, forever) with a blown knee. Then second stringer Ryan Powdrell went down with a gruesome ankle injury. Sports Illustrated likened it to the drummer position in "This Is Spinal Tap", and that was two days before third stringer Stanley Havili went down today with a broken fibula against Arizona.

So it may be fourth stringer Mike Brittingham next week, unless they convert someone from another position.

Viidoo Internet TV Pleases Me

I try to time my trips abroad as much as possible so as not to miss any USC football homegames, but it still sucks that the away games aren't televised overseas. I've had to make do with sketchy internet reports from Until now.

I just discovered internet television. It has most of the major US networks, as well as HBO, CNN, and ESPN. It appears to be a P2P stream-sharing kind of thing, but it works pretty well, considering it's likely "unofficial" nature. It freezes every 20 seconds or so, for just a second or two, but the picture quality is adequate in full screen mode, and it's a far cry better than hitting F5 over and over at

Viidoo makes me a happy camper. Gotta go... I'm about to watch my Trojans throw down with the Wildcats on ABC.

Friday, September 22, 2006

The beef jerkey diet

I've been low carbing lately which is a little tough to do while I'm travelling in the Philippines. So I've been eating a lot of beef jerky (Jack Links, to be more specific. The Sweet&Hot is awesome and really cheap at Target) that I brought with me. I noticed yesterday that I was really thirsty. It could have been the 520mg of sodium per serving, but it got me to wondering. How much of a normal person's water intake comes from food, and what happens if you eat food that doesn't contain water?

Apparently, about 20% of your water intake comes from food. So if you drink 8 glasses of water per day to bring your normal total intake to 10, and you switch to the jerky diet, you'll have to drink an extra two glasses per day.

Maybe you won't find that interesting, but at least my curiosity has been satisfied, if not my thirst.

Thursday, September 14, 2006

Fuel Prices Poised to Drop Sharply

According to the Seattle Times, crude oil prices could be poised for a drop that could send US gasoline prices to $1.15 per gallon. You see, oil prices aren't really based on supply and demand the same way other goods are. The futures market for oil ensures that pricing will take into account future potential supply and demand. Investors have been speculating for the last couple years that with unrest in various oily spots of the globe, there could be a major oil disruption. Companies that rely on oil have responded by stockpiling.

But... the disruption has yet to materialize and some of those hot spots are beginning to cool. And people are sitting on a ton of oil that is priced way higher than actual supply and demand for the physical good should dictate. Bloop. That's the sound of an oil bubble popping.

SUV owners stand to benefit from this (excepting, of course, SUV owners who are sitting on major stockpiles of oil purchased at $60 per barrel), clearly, but this sounds like it could also be a boon for the world's airlines, which have been struggling of late. Maybe the Northwest flight attentands won't have to strike after all.

Tuesday, September 12, 2006

Stingray Retribution

Some people are weird, you know?

Apparently, there has been a recent rash of dead and mutilated stingrays turning up on the Australian coast. Apparently, people are taking out their anger over Steve Irwin's death out on all of the Stingrays of the ocean.

If people are stupid enough to do this, is it any wonder we have hate crimes against Muslims when we've been supposedly at war with Islamic terrorists for 5 years?

Monday, September 11, 2006

Don't Give In To The Hysteria


Cheap Trader Joe's Wine Review: Prosperity Red

Prosperity Red Cabernet Sauvignon
TJ's Price: $4.99

Drinkable for the money, but nothing to write home about, Prosperity Red California Cabnernet Sauvignon is fruity, sweet, and acidic. I can definitely detect a little apple and some cherry.

3 pennies out of 5.

You can see some other folks thoughts here.

Saturday, September 09, 2006

The Walrus and The Carpenter

I just found out that the works of Lewis Carroll are in the public domain. Oh happy day!

The sun was shining on the sea,
Shining with all his might:
He did his very best to make
The billows smooth and bright--
And this was odd, because it was
The middle of the night.

The moon was shining sulkily,
Because she thought the sun
Had got no business to be there
After the day was done--
"It's very rude of him," she said,
"To come and spoil the fun!"

The sea was wet as wet could be,
The sands were dry as dry.
You could not see a cloud, because
No cloud was in the sky:
No birds were flying overhead--
There were no birds to fly.

The Walrus and the Carpenter
Were walking close at hand;
They wept like anything to see
Such quantities of sand:
"If this were only cleared away,"
They said, "it would be grand!"

"If seven maids with seven mops
Swept it for half a year.
Do you suppose," the Walrus said,
"That they could get it clear?"
"I doubt it," said the Carpenter,
And shed a bitter tear.

"O Oysters, come and walk with us!"
The Walrus did beseech.
"A pleasant walk, a pleasant talk,
Along the briny beach:
We cannot do with more than four,
To give a hand to each."

The eldest Oyster looked at him,
But never a word he said:
The eldest Oyster winked his eye,
And shook his heavy head--
Meaning to say he did not choose
To leave the oyster-bed.

But four young Oysters hurried up,
All eager for the treat:
Their coats were brushed, their faces washed,
Their shoes were clean and neat--
And this was odd, because, you know,
They hadn't any feet.

Four other Oysters followed them,
And yet another four;
And thick and fast they came at last,
And more, and more, and more--
All hopping through the frothy waves,
And scrambling to the shore.

The Walrus and the Carpenter
Walked on a mile or so,
And then they rested on a rock
Conveniently low:
And all the little Oysters stood
And waited in a row.

"The time has come," the Walrus said,
"To talk of many things:
Of shoes--and ships--and sealing-wax--
Of cabbages--and kings--
And why the sea is boiling hot--
And whether pigs have wings."

"But wait a bit," the Oysters cried,
"Before we have our chat;
For some of us are out of breath,
And all of us are fat!"
"No hurry!" said the Carpenter.
They thanked him much for that.

"A loaf of bread," the Walrus said,
"Is what we chiefly need:
Pepper and vinegar besides
Are very good indeed--
Now if you're ready, Oysters dear,
We can begin to feed."

"But not on us!" the Oysters cried,
Turning a little blue.
"After such kindness, that would be
A dismal thing to do!"
"The night is fine," the Walrus said.
"Do you admire the view?

"It was so kind of you to come!
And you are very nice!"
The Carpenter said nothing but
"Cut us another slice:
I wish you were not quite so deaf--
I've had to ask you twice!"

"It seems a shame," the Walrus said,
"To play them such a trick,
After we've brought them out so far,
And made them trot so quick!"
The Carpenter said nothing but
"The butter's spread too thick!"

"I weep for you," the Walrus said:
"I deeply sympathize."
With sobs and tears he sorted out
Those of the largest size,
Holding his pocket-handkerchief
Before his streaming eyes.

"O Oysters," said the Carpenter,
"You've had a pleasant run!
Shall we be trotting home again?'
But answer came there none--
And this was scarcely odd, because
They'd eaten every one.

Nurse Strangles Armed Intruder With Bare Hands

A nurse in Oregon returned home from work to find a man armed with a hammer in her house. So she did what any of us would have done... she strangled him to death. The question of how is answered with the fact that she's 5'7, 260 lbs, so she had 80 pounds on the guy. But seriously, strangling someone in "self defense"? I picture Cary Elwes strangling Andre the Giant in The Princess Bride. Only with the body types reversed.

Friday, September 01, 2006

How to Make Hobo Wine

Today on wikihow, an article on how to brew hobo wine using grape juice, sugar, and yeast. Sweet!

Notes of wet cardboard accent a fruity nose. A concentrated finish, with just the slightest murmur of wet hobo.

Thursday, August 31, 2006

College Football Season Starts Today!

Boston College vs. Central Michigan... one for the ages.

I'm just so excited for college football I don't even care who's playing. Trojans Razorbacks in 47 hours.

Tuesday, August 29, 2006

Blogger Functionality

I was trying to use the "e-mail post" feature of Blogger, which would be tres cool, because I am tres lazy. Too lazy even to punctuate this sentence

Unfortunately it won't autopublish, and I think it has something to do with Word Verification. Turns out that Blogger thinks that I am running a spam blog, so they make me do a "captcha" before I can publish a post. I've requested that they have a human review the blog, and if I'm able to convince them that I, too, am human (I think, therefore, I should am, right?), then that should fix the captcha which should fix the email posting, which means that I should be able to post without thinking (at which point, I may cease to am - I'm not clear on whether past thinking qualifies).

And in case you're interested, this is the word that will prove I am human: pjubmnub. Try using that in a sentence, spammer scum.

Miles Per Dollar

Some enterprising person has put together a very simple Miles Per Dollar calculator. Nothing earth shattering, but it can be a good idea to think about gas in this way. I can think of a few reasons to make the calculation:

  • total cost of owning a new car. What's the MPG? Does it use regular or premium? If you want to be clever, you can factor in the price of the car and how many miles you expect it to drive it, minus the residual value.

  • deciding whether it makes sense to drive or take some other form of transportation. My car takes 92 Octane, which costs about $3.40 per gallon. My car gets about 18 miles per gallon, so I get about 5.29 miles per dollar. Cost of a 120 mile one-way trip to San Diego: $23. Cost of taking the train: $32. Of course, driving depreciates my car, and taking the train uses a bit more of my time, depending on when I go.

Monday, August 28, 2006

What You Can't Say

It's an old article, but a good one. I just stumbled across this treatise from Paul Graham entitled "What You Can't Say" that tries to answer this question: If we think that a lot of the stuff people accepted as "right" 50 years ago is stupid and wrongheaded, what do we think now that people in the future will similiarly scoff at? It delves into the changing nature of taboos.

Certainly the fact that they value open-mindedness is no guarantee. Who thinks they're not open-minded? Our hypothetical prim miss from the suburbs thinks she's open-minded. Hasn't she been taught to be? Ask anyone, and they'll say the same thing: they're pretty open-minded, though they draw the line at things that are really wrong. (Some tribes may avoid "wrong" as judgemental, and may instead use a more neutral sounding euphemism like "negative" or "destructive".)

When people are bad at math, they know it, because they get the wrong answers on tests. But when people are bad at open-mindedness they don't know it. In fact they tend to think the opposite. Remember, it's the nature of fashion to be invisible. It wouldn't work otherwise. Fashion doesn't seem like fashion to someone in the grip of it. It just seems like the right thing to do. It's only by looking from a distance that we see oscillations in people's idea of the right thing to do, and can identify them as fashions.
Long, and well worth the read.

Sunday, August 27, 2006

The Pioneers of Professional Blogging

There's an article in this month's Business 2.0 called "Blogging For Dollars", that mentions several popular sites like Tech Crunch and BoingBoing. BoingBoing, according to the article, is making about a million bucks per year in ad revenue. Doesn't sound like much, but it's just four people, and they all have other jobs and stuff. Not bad at all. The biggest surprise though has got to be, which is apparently pulling down hundreds of thousands of dollars per month, despite a lack of original content.

The conventional wisdom is that successful blogs pic a very specific area (like camcorders) and focus on it with great energy. But sites like BoingBoing, Fark, and certainly don't fit that mold.

V has finally started a blog that looks to turn into a wedding blog, so we'll see how that goes. I, meanwhile, am way too scattered to focus on a particular area.

Monday, August 21, 2006

California foreclosures up 67% in Q2

The latest quarterly results are in, and California foreclosures are up 67% from the last quarter. That actually deserves some (!!!). Phoenix and Las Vegas were hard hit too, mostly due to speculators learning what "speculation" means. As in they got the cold end of the speculum.

Oh, that's so wrong. Sorry.

Sunday, August 20, 2006

The origins of defenestration

"Defenestrate" - to throw someone or something out a window - seems to be one of everyone's favorite words. It's simultaneously simple in its directness, and a bit sesquipedalian. The etymology isn't exactly a mystery. It's the simple combination of a latin prefix with a latin noun. But why did this word attain common English usage? You could create other words in this fashion just as easily. How about detabernated - to be have been forcibly ejected from a bar? But nobody, alas, uses that word.

It seems that defenestrate hit the English scene around 1618, when two imperial commissioners were thrown from a window of the palace in Prague, having been found guilty of violating religious rights. The event was dubbed the Defenestration of Prague, and instigated the Thirty Years War. The universal pleasure of appropriately using "defenestrate" in a sentence has ensured its permanent place in the English vocabulary.

In a mostly unrelated feat, I'll now use three of my favorite big words in one sentence.

Despite her avoirdupois, or perhaps because of it, the callipygian singer cum actress was widely considered to be pulchritudinous.

And if I had been able to find a way to get "lagniappe" (free with purchase) into that sentence, you can bet your finely developed buttocks I would have.

Saturday, August 19, 2006

Snakes on a Freakin Plane

SoaP came out yesterday. The early reviews have been very positive, the opening nights I've heard about sounded like a blast. And I'm stuck in the Philippines.

I seriously am not sure I can wait, but I promised the V-Train I'd wait for her.

The image to the right links to someone else's CafePress shop. I thought it was only fair to link it since I stole their image.

Rents Going Up, Finally

According to the New York Times, after a long lull rents have increased 3.5% to 5% in the last year. This is very significant, because the home price to rents ratio has been out of whack for a while. Rent and mortage are two different ways of paying for something very similiar: a place to live. Rents and home prices, in the long run, maintain something that approximates a consistent ratio. This is affected by things like mortgage rates, but at the end of the day the two must come into alignment.

In recent years, it has been much cheaper to rent than to own, indicating that people are speculating on future rising home prices. That the two must come back into alignment means that there either needs to be a housing price crash, a huge increase in rents or, more likely, some combination of the two.

A major increase in rents without a decline in housing prices would mean that real factors have conspired to make living space actually worth more. While that's certainly possible, any time that there's speculation (as there clearly has been) it's a pretty clear indicator that something is being overvalued.

The rise in rents is actually good news if you're a homeowner, because any rise in rents will reduce the amount of a potential housing crash. And it may make you feel better, because you're not overpaying quite as much for your living space.

Thursday, August 17, 2006

Idiot's guide to sleeping

My hotel has one of those automated "wake-up call" systems. You just punch the time you want to wake up in military time into the phone. Let's see, I've got 5 hours to sleep so I should wake up at 10:00PM. Punch two-oh-oh-oh.

Wake up, drink coffee, shower, get dressed. Oh. Damn.

Monday, August 07, 2006

Review: Talladega Nights

Talladega nights is one of those movies that you pretty much know in advance whether you are going to enjoy it or not. Did you like Old School? Then you're going to like this one. I don't want to say too much else about it except that
- 1) this movie has inspired me to get a Nacho Cheese fountain for my wedding and
- 2) this movie has given me hope that people will rise up and demand a Manimal DVD.

Tuesday, August 01, 2006

Foreclosures May Be Less of an Opportunity Than You Think

I'm very interested in foreclosures, because there aren't any other good real estate deals out there right now what with the imminent collapse of the housing market. But this article points out that even with foreclosures up, the deals may not be out there. Banks are wising up to the fact that they're losing potential profits the way they've been handling foreclosures, and they're quickly shutting the arbitrage opportunities.

"Foreclosures sound good in theory, but now the banks have really gotten smart and they have realized they can get market value for their homes"

On top of that, the professional vultures are snapping up any good deals that are available. So I plan to keep watching this market, but I'm not as optimistic as I was a few months ago.

AOL Update: Announcement Tomorrow

I posted earlier about AOL's potential move to a completely ad-supported model, basically sacrificing their billion dollars in subscriber revenue to create a long-term competitor to with free e-mail, IM, VOIP, video content, etc. The Time Warner board will announce their new strategy tomorrow.

I don't see any alternatives for them. The ISP model is dying a slow, painful deat for them.

Sunday, July 16, 2006

Starwood Preferred American Express Card

I was just looking at the various rates of return on rewards credit cards, and they break down as follows. For the miles and points cards, I divided the cost of the redeemed reward (e.g. a flight from LAX to NYC) by the number of points required to redeem it. A $350 flight that costs 25,000 points to redeem is worth a 1.4% ROI (350/25,000).

1% - Discover and most cashback cards (no cashbacks over 2% except for select purchases)
1.2% - Marriott rewards Visa Card
1.5% - Airline miles cards (Northwest, United, etc)
3.5 to 5% - The Starwood Preferred American Express card

As you can see, there's really nothing close to the Starwood Amex in terms of bang for the buck. I just financed 5 nights in Europe at a nice Sheraton on points I collected from this Amex card.

Monday, July 03, 2006

Net Neutrality

Senator Ted Stevens (R - Alaska), offers up the other side of the Net Neutrality debate.

I just the other day got, an internet was sent by my staff at 10 o'clock in the morning on Friday and I just got it yesterday. Why? Because it got tangled up with all these things going on the internet commercially.

They want to deliver vast amounts of information over the internet. And again, the internet is not something you just dump something on. It's not a truck.

It's a series of tubes.

Sunday, July 02, 2006

Review: Superman Returns

The action seemed like an afterthought, and the character story wasn't good enough to make up for it. Enh.

Saturday, July 01, 2006

AOL Considering Dropping Subscription Model

Just heard that AOL is considering dropping their subscription model and going towards a Yahoo type internet portal strategy. It's gutsy because it will cost them billions in subscription revenues, but probably the only way to prevent a slow and painful death. Should be interesting to see if the Time Warner board goes for it.

Governing Mandy

“Come here, Mandy.”

She froze at the door, her spider-sense and loins both tingling with a mixture of anticipation, fear, and Tend-Skin ™. Slowly she turned to face the cecilfielderian figure that called out to her. His eyes were wild, and the statesman behind them had been replaced with the pure energy that can only be the embodiment of lust, love, or hatred. In these eyes, she sensed all three. She was certain that he could hear her heart pounding as she approached him.

“Y-yes, governor?”

“Mandy, did you know that I am the most powerful man in the world?”

He leaned forward until his face was just six inches away from hers. At this distance, his impossibly wide shoulders stretched as far as her eyes could see. As he spoke, the sweet scent of cumin from this afternoon’s turkey chili mingled with the musky odor of a long day of bipartisan legislating.

“Really?” Her lips mouthed the word, but the sound that accompanied the movement was more a squeek than decipherable syllables.

“No president can win without California, and I can deliver California. Plus, there has never been a president who could beat me arm-wrestling, and there never will be.”

The look in his eyes dared her to contradict him. She said nothing. A powerful near-silence filled the room, highlighting the dueling banjos of their breathing and the powerful beating in her ears.


In the days to come, Mandy would vividly remember this moment every time she dressed, sat, or otherwise interacted with the gubernatorial handprint on her left asscheek. The blow knocked her forward into him, her face suddenly burried between the world’s two most recognizable pectorals.

“Who is your daddy?”

Mandy wanted to back away, but was frozen by curiousity and the giant hand that still firmly gripped her posterior. Still, she knew that if she didn’t leave now to collect her wits, she would be absorbed into this oak of a man like Deca Durabolin into a glute.

Her voice trembled. “I have to pee,” she whispered. The handsome Austrian looked at her. He raised an eyebrow inquisitively.

“I’ll be back,” she promised, her voice now steady.

A smile crept onto the governor’s face. He nodded, stroked her rump with his thumb, then released it. She turned and exited into the hallway, passed the restroom, and entered the elevator. She did not relax until the doors closed, leaving her alone with her regrets.