tag:blogger.com,1999:blog-48199385430310506562024-03-12T17:29:45.331-07:00Home Vacationdevihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.comBlogger2609125tag:blogger.com,1999:blog-4819938543031050656.post-69222836672452397382013-11-18T06:44:00.000-08:002013-12-13T08:51:59.393-08:00Why do Townhouses never have decks? (Upgrades)<br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdFOt2K1gOWby0j5WCDaPFvvB7qlhpBpN2ZrFLGyJ_Vq2EykLtCSqevRlIBzS57aU8h0dUN1ilgdjiS_Hd_TPEiKeXIa3O2WNH0pTh-vrGkmYTL_mfQol6SjkXUkUTpk_aw_6aZGS7DRg/s1600/no+deck.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdFOt2K1gOWby0j5WCDaPFvvB7qlhpBpN2ZrFLGyJ_Vq2EykLtCSqevRlIBzS57aU8h0dUN1ilgdjiS_Hd_TPEiKeXIa3O2WNH0pTh-vrGkmYTL_mfQol6SjkXUkUTpk_aw_6aZGS7DRg/s400/no+deck.jpg" width="400" /></a></div><div style="text-align: center;"><i>A lot of new home construction is sold with no deck on the house, but rather a french door with a piece of fence across it, so the owner can "add" a deck as an upgrade. In many developments, these decks never get built for years. What's up with that?</i></div><div style="text-align: justify;"><br />As I noted in my <a href="http://livingstingy.blogspot.com/2012/08/upgrades.html">Upgrades</a> posting, home builders love to sell buyers on the concept of "upgrades". When Mark sold townhouses in Northern Virginia, he was encouraged to sell these lucrative add-ons, as they added a lot to the bottom line for the builder. A $400,000 townhome could be "upgraded" to a $500,00 townhome, in short order, simply by selling the deluxe kitchen, upgraded carpeting, and marble bath accents - as well as a finished in-law room in the basement.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The builder makes money on these upgrades, as they don't cost him much more than the basic level of materials. Labor is the big cost, and whether you use a crappy "contractor grade" carpet or an upscale plush makes little difference to the overall cost. And since the builder owned a marble business, adding marble accents was a real money-maker for him.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But one upgrade that is rarely sold in most home developments is the deck. When traveling across America, we see a lot of these "new homes in a cornfield" with sliding glass doors blocked off with little fences, as shown in the photo above. The homeowner did not opt for the "deck upgrade" and likely won't add one, for many years.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Why is this?</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Well, from the builder's point of view, a deck is an additional structure, and something that requires both additional labor <i>and</i> materials. And the labor involved is not labor you have on-site. Your framers are not going to be good deck builders, nor are your sheetrock workers, plumbers, or electricians. You basically have to "farm out" this business to a deck-builder.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So the home builder gets a quote for a deck, <i>doubles the amount</i>, and presents that as an "upgrade" to the buyer. Not surprisingly, most buyers balk at the high cost of the added deck, and say to themselves, "We'll add the deck later!"</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And since they are new home owners - and have financially stressed themselves out over the optional sun nook and upgraded carpet - they can't afford to put the deck on the house, at least for five or ten years.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">As a result, you see a lot of these new homes, <i>sans deck</i>, for many years after they are built.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And maybe another reason builders don't want to mess with decks is the liability involved. When we lived in Northern Virginia, not a year would go by without some tragic deck story hitting the paper. Harry and Harriet Homeowner contract out to Bubba & Co. to build a deck. And when it is finished, they have a party, invite all their friends, and crank up the music and have 20 of their friends dancing on the new deck.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Since Bubba & Co. lag-screwed the deck into the siding (and not into anything solid) the deck collapses, injuring, maiming, and perhaps killing some of the guests. That's about when you wished you had that umbrella liability coverage!</div><br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMjaZK-ICKpiq0PAqChGOHx14T-6vZja1-LLUx-aMFb6nMKl-PDEp0GAXOoRnTMg7vbrwIFsf3ZuaqcFkGkPxfVflxryrWK4T-BRsfBbNym5wSQ6gG6x0LZHQ5p9RS8Tmy5V40nurtXkM/s1600/deck+disaster.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="325" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMjaZK-ICKpiq0PAqChGOHx14T-6vZja1-LLUx-aMFb6nMKl-PDEp0GAXOoRnTMg7vbrwIFsf3ZuaqcFkGkPxfVflxryrWK4T-BRsfBbNym5wSQ6gG6x0LZHQ5p9RS8Tmy5V40nurtXkM/s400/deck+disaster.jpg" width="400" /></a></div><div style="text-align: center;"><i>Bolting a deck into the side of a house as the main means of support is not a very good idea, particularly if the bolts are just going into siding.</i></div><br /><div style="text-align: justify;">For this reason, many responsible deck builders put posts near the house, to carry the load of the deck. The deck may still be bolted to the house (to help keep it from moving) but the load is carried by beams and posts that are independent of the house structure.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So what's the point of this post? Perhaps none. It just got me to thinking, after reading my "Upgrades" posting, how many vinyl-clad townhomes-in-a-cornfield we see across America, with no decks on them.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Are builder upgrades worthwhile? I suppose that would depend on the upgrade involved. Bear in mind that a lot of things like carpeting and even kitchens, end up being replaced, over time. It may be cheaper to go with the base carpeting and then wear it out over ten years, rather than "upgrade" to fancier carpeting from the get-go. This is particularly true if you are financially stressed in buying the home in the first place.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And bear in mind that once the townhomes (or houses) are built, the value of each home is going to be roughly the same, as neighborhood (location) and home size determine price more than fixture and amenities. If you live in the home for 10-15 years, chances are, the new owner is going to rip out the kitchens and baths, anyway.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I guess it also illustrates how buying a home that <i>already has the things you want</i> can be a far better deal. While a deck adds some value to a home, the value added is generally <i>less than the cost of construction</i> of the deck. So it may make more sense to buy a home that some homeowner already plowed money into, rather than buy new. In some cases, <a href="http://livingstingy.blogspot.com/2010/02/should-you-remodel-or-move.html">it is better to move than remodel,</a> as remodeling returns only pennies on the dollar, in terms of increased home value for money spent.</div><div style="text-align: justify;"><br /></div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-3134410317329096772013-11-17T05:52:00.000-08:002013-12-13T08:51:59.400-08:00Google Goes Evil (Ad Blocker Plus)<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFbCnhNno_E9ck1FNcLnELb5EaqGtbga6D8Cg4C8HFVLSsSE6jlQR6-pQIztMay0vtJfKVvAyX7F_XoeNd-ArEzRBe_rzjtLr731cUtWrJ7swZC8RF9Ea4ZZpVzSM4yKc_ZDCfP2j4Q0A/s1600/dr.+evil.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFbCnhNno_E9ck1FNcLnELb5EaqGtbga6D8Cg4C8HFVLSsSE6jlQR6-pQIztMay0vtJfKVvAyX7F_XoeNd-ArEzRBe_rzjtLr731cUtWrJ7swZC8RF9Ea4ZZpVzSM4yKc_ZDCfP2j4Q0A/s320/dr.+evil.jpg" width="286" /></a></div><div style="text-align: center;"><i>Google has gone Dr. Evil on us. </i></div><div style="text-align: center;"><i>By the way, I believe Dr. Evil was based on the real-world character of <a href="http://en.wikipedia.org/wiki/Fritz_Haber">Fritz Haber</a>.</i></div><i><br /></i><br /><br /><div style="text-align: justify;">The other day I was using Firefox, and I got a notice that I should update to a newer version of Firefox. I believe this was a legit notice, but nevertheless I was busy, so I squelched it.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Later on, I decided to update Firefox manually, so I put in "Firefox Update" into Google and saw several hits for what appeared to be Mozilla Firefox.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><i>Appeared to be</i> being the operative words.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The first hit was an <i>advertisement</i> on Google for something called "Firefox_Mozilla_todownload" or some such nonsense. Not thinking clearly, I hit the link and a page that looked a lot like the real Firefox download page came up.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I thought, "This looks legit, they even have the Firefox logo, albeit very large" and I hit "download now" and my computer froze.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Thankfully, Malwarebytes, Spybot, and Windows Defender were all smarter than I was. They blocked the download on the spot and would not let me open it.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I did some more research and realized that "todownload.com" is a virus site that loads the nearly-impossible-to-get-rid-of Babylon search redirector. I dodged a bullet there.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But the question remains - why is Google accepting ad money from sites that download viruses, adware, and other sorts of malware to your computer?</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">What ever happened to Google's motto of "Don't be Evil"?</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Today, it is "Don't be evil - be DOCTOR EVIL!"</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Google has gone over to the dark side.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Fortunately for every evil Corporation like Google, there are others not-so-evil, like Mozilla, or Spybot, or Ad Blocker Plus.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Ad Blocker Plus, which can be downloaded for free from <a href="https://adblockplus.org/">https://adblockplus.org</a> (for both Firefox and Explorer) will block ads on Google, on News sites, and even on The Daily Show (no more ads for Axe Body spray - hooray!).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">It works as a plug-in and works seamlessly. There is one setting you have to tweak, however. In Firefox, go to "tools" and then "ad block plus" and then "filter preferences" and then UNCHECK the box labeled "allow some non-intrusive advertising" (an oxymoron if there ever was one). This will kill all the ads on Google searches, including the ones from odious malware peddlers.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I would feel bad for Google, blocking their ad revenue and all. But Google has it coming. Actually, Google has a whole lot of bad shit coming their way, if they continue to allow things like malware sites to "advertise" on Google.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And perhaps this is a turning point for Google. Google right now seems omnipresent and successful and profitable. But they are just one Windows-8 away from oblivion (where Microsoft is headed, if recent events are any indication).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">You can only annoy your client base so much, until they start seeking out alternatives. Already, I am finding that I have to go to Bing or Yahoo or some other search engine to find articles and resources, as Google tries to pre-filter my results based on what it thinks I want to see (e.g., stuff I have already seen). And the harvesting of data from my e-mails and other sources is starting to get, well, creepy.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">For example, if I mention here, in this blog, that I want to buy a new Toyota, you can bet that the next time I log into a Google site, the sidebar ads will be for the local Toyota dealer. Let's try this and see if it works.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Of course, ad-blocker plus may just thwart those plans!</div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-52507916838599954922013-11-16T05:58:00.000-08:002013-12-13T08:51:59.486-08:00Crocs goes private? (an IPO story)<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEji8HUaIc8W8UNINW8A5crWQJ6G2g9aKMpjxdONG2gGp6K1yYWoXBUp0ZWjPIGkgIgjnxBqCMgjbZSGJjXnXoMsreEk3MtGd1URYTLmuWlOPpnQxExrEA4NodqlKzaa_g0mSJWIi75e3kg/s1600/crocs.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="308" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEji8HUaIc8W8UNINW8A5crWQJ6G2g9aKMpjxdONG2gGp6K1yYWoXBUp0ZWjPIGkgIgjnxBqCMgjbZSGJjXnXoMsreEk3MtGd1URYTLmuWlOPpnQxExrEA4NodqlKzaa_g0mSJWIi75e3kg/s320/crocs.jpg" width="320" /></a></div><br /><br /><div style="text-align: center;"><i>A company that makes one kind of trendy shoe might not be a good company to invest in.</i></div><br /><br /><div style="text-align: justify;">When I was in Law School, we studied Economics and Corporate law, and I learned a little bit how Corporations work - or at least how they are supposed to. One thing that puzzled me - and puzzles me to this day - is how a company that pays no dividends, ever, could be worth anything at all, to the small investor.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Our professor explained about <a href="http://livingstingy.blogspot.com/2010/12/equity-or-income.html">"retained earnings"</a> and how a company, instead of paying out dividends (which are taxable as income) could keep these earnings on the books, and thus the value of the company <a href="http://livingstingy.blogspot.com/2011/12/why-do-online-trading-sites-promote.html">stock would be worth more</a>. <a href="http://livingstingy.blogspot.com/2012/02/how-companies-pay-back-shareholders.html">If shareholders sold stock, they would make a profit,</a> and thus pay taxes at the capital gains rate (which is usually lower).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">This sounded all nice in theory, but the problem is, most stocks are horrifically overvalued to begin with. The vaunted "market cap" of a stock (multiplying the stock price times the number of shares) is well above what the actual liquidation value of the company would be - even with these "retained earnings".</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Even after the professor's explanation, it all seemed, well, sort of a scam. And to some extent, we were both right. Companies that go public and never pay any dividends, really are sort of a scheme, in that to keep the scheme going, it relies on people continually viewing the value of the company as increasing - even if the company will never "pay out" in cash, its actual value, either in dividends or in liquidation.</div><div style="text-align: justify;"></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Crocs, the company (CROX) is poised to go private -<i> again.</i> The company was founded by three individuals who bought out a Canadian company which made the closed-cell foam shoes. They brought the shoes to the boat show in Ft. Lauderdale, and the rest was history - at least for a while.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Crocs became a sensation overnight. People raved that they were good on your feet and that the soft foam design was great for people who worked standing up all day. Suddenly, it seemed, everyone had a pair.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But the fad lasted only about two years. And just as suddenly as people started to love Crocs, just as suddenly many people decided to hate them. They are ugly and weird looking, to be sure. And they seem to cater to the child within all of us - the one too fat and lazy to tie his own shoes, or even be able to reach down that far.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Crocs and America's Obesity Epidemic were made for each other.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Unfortunately, despite a number of acquisitions of smaller shoe companies, the company never really expanded beyond its original product line - in any significant way. And so, about six years after its IPO, the rumor is the company will again go private.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Was buying CROX stock a good investment? Not really, unless you could time the market (that pesky broken time machine, again) and buy it at its nadir and sell at the peak. The company never really paid a dividend, except in connection with a one-time 2:1 stock split.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The chart below illustrates the problems with CROX:</div><br /><br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQ-zau2iBVQb4aNIe0QvXxl_6tgZDsuoRdJ-ZjcPzUfPReys1Kr9_cbhRqxqxoHmi5c4nGoqE1ZpKbxOwx64H6QCQxlhA9SceMKKe56mwcqGg4sPacq5SFkbYTNw-LtJ4Q8vPeDA-2l2Q/s1600/CROX.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="295" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQ-zau2iBVQb4aNIe0QvXxl_6tgZDsuoRdJ-ZjcPzUfPReys1Kr9_cbhRqxqxoHmi5c4nGoqE1ZpKbxOwx64H6QCQxlhA9SceMKKe56mwcqGg4sPacq5SFkbYTNw-LtJ4Q8vPeDA-2l2Q/s400/CROX.png" width="400" /></a></div><br /><div style="text-align: center;"><br /></div><div style="text-align: center;"><i>CROX, unlike a lot of other IPO stocks, did not "pop" out the gate, but took a couple of years to peak in price. It was hammered in the recession of 2009 and then slightly recovered. Sales have slacked off, though, and the company wasn't able to expand beyond its single-product offerings.</i></div><div style="text-align: center;"><br /></div><br /><br />From Wikipedia:<br /><br /><div style="text-align: justify;"><blockquote class="tr_bq">Crocs completed the initial public offering of its common stock in February 2006. It began trading on the NASDAQ Stock Market under the symbol CROX. On October 31, 2007 the stock CROX dropped from $75 per share to slightly under $40 (its value six months previously) when the company announced decreased revenue projections.<sup> </sup> On April 14, 2008, during the midst of the <a class="mw-redirect" href="http://en.wikipedia.org/wiki/Credit_crunch_of_2008" title="Credit crunch of 2008">Credit crunch of 2008</a>, the stock dropped 30% in <a href="http://en.wikipedia.org/wiki/Extended_hours_trading" title="Extended hours trading">after-hours trading</a> after the company issued a press release in which they significantly guided down earnings estimates for the first quarter. In the same statement they also said they would <a class="mw-redirect" href="http://en.wikipedia.org/wiki/Lay_off" title="Lay off">lay off</a> its 600 <a href="http://en.wikipedia.org/wiki/Quebec_City" title="Quebec City">Quebec City</a> factory employees as retailers have been reducing orders, though about 100 sales and marketing positions would remain. "The retail environment in the U.S. has become increasingly challenging as consumer spending and traffic levels have slowed," <a class="mw-redirect" href="http://en.wikipedia.org/wiki/Chief_Executive_Officer" title="Chief Executive Officer">Chief Executive Officer</a> Ron Snyder said. During the financial crisis, CROX dropped to as low as $0.79 before rebounding ($15.50 by November 2010). On October 18, 2011, Crocs stock suffered a single day drop of about 39.4% on lowered earnings and revenues forecast.<sup class="reference" id="cite_ref-66"><a href="http://en.wikipedia.org/wiki/Crocs#cite_note-66"></a></sup>In June 2013, Crocs reported a 42.5% decrease in net profits from a year before. As a result the stock fell 20.2% in one day.<sup class="reference" id="cite_ref-67"><a href="http://en.wikipedia.org/wiki/Crocs#cite_note-67"></a></sup></blockquote></div><br /><div style="text-align: justify;">When the stock went public at the IPO,<a href="http://ipo.findthecompany.com/l/2117/Crocs-Inc"> the IPO Price was $21</a>. As you can see, the market yawned, at least initially. However, as the shoes became more popular, people started bidding up the stock - to a high of $75 a share. The shoes suddenly seemed everywhere, and once again, people confused popularity with profitability. When something is mentioned in the media a lot, people bid up the stock.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But then the stock crashed, as high profits were not realized. The crash of 2009 hammered the stock further. It recovered later on, briefly hitting $30 a share, until it dropped to about $10 a share today. Quite a roller coaster ride!</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Was this a good investment? If you bought at the IPO price of $21 a share, you are now looking to be bought out at $13 - losing about half your initial investment. Unless you sold out at $75 a share, or bought at the nadir in 2009, you are poised to lose a lot of money on this stock, or at best, break-even (which is akin to losing money, if you held the stock for eight years).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">In other words, the only way you could have "made money" on CROX was to <a href="http://livingstingy.blogspot.com/2012/06/problem-with-timing-market.html"><i>time the market</i></a> - know in advance when the stock price would peak and valley - and the profit from the losses of other buyers and sellers in the marketplace. Timing the market is akin to gambling. Unless you cheated (knew insider information about the profit forecasts) you are just playing with numbers. And in most cases, gamblers lose.</div><div style="text-align: justify;"></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And the shoe business is murder. Back in 1968, my Dad looked into buying a shoe company in Paris, Illinois. The amount of debt he would have had to take on would have been staggering. And the business was one of margins, even back then. If you had the right fashions and styles, you might be able to charge premium prices. Otherwise, you had to compete on price -which means keeping a very tight ship and finding your profits in marginal cost savings.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Since those days, the shoe business has gotten worse. The Chinese and Koreans control most of the market, manufacturing shoes even for American shoe makers. Very few American companies make shoes in the USA anymore, other than a few artisan shoe makers and New Balance. There are no easy profits in shoes, unless, like Nike, you can create a "must-have" shoe and sell it for $200, when the costs are less than $20.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Crocs does have a few Patents on their shoes (Design and Utility) which issued around 2006 (and thus will not expire until about 2020 or so). And they have used ITC actions to go after knock-off artists who are importing cheap look-alike shoes. In theory, they should be able to maintain a monopoly on these types of shoes. But the problem with that business model is this: The knock-off artists made and sold look-alike shoes when they were trendy and hip. Once the hip factor wore off, well, they were all to happy to fold their tent and move on to the <a href="http://livingstingy.blogspot.com/2012/02/whats-deal-with-cupcakes.html">next hula-hoop</a>. Patents are of little use for trendy products.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Yes <i>hula-hoop.</i> I said it. Have you seen anyone wearing Crocs lately? If you have, you remember it because they just are not as omnipresent as they once were. The fad has faded, and it is hard to believe that Crocs will again be as ubiquitous as they once were - except perhaps as a retro fad in 20 years.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So who makes out in this deal? Well, the founders of the company undoubtedly sold some stock along the way. Given what they paid for the initial company and what they sold their shares for, they probably made out. And even at the price of $13 a share, the founders still make out like a bandit. Out of about 40 million shares of stock, only about 10 million were sold in the IPO, which means the founders and insiders kept about 75% of the company (how foolish, <a href="http://livingstingy.blogspot.com/2012/02/buying-investments-you-dont-understand.html">Martha Stewart kept 96% </a>of hers, <a href="http://livingstingy.blogspot.com/2011/06/facebook-launches-new-user-interface.html">Facebook </a>kept 95%!).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Why would they go private now? Sales are down, the fad is over, and the founders want to sell out:</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><blockquote class="tr_bq">Crocs posted a 2 percent decline in sales for the third quarter, hurt by weakness in the Americas and Japan. The company said it saw less discretionary spending for footwear, apparel and other consumer goods in the U.S.</blockquote><blockquote class="tr_bq"> "I wish I could tell you we were expecting a big improvement in consumer confidence in the U.S. throughout the year, but we are not," Crocs Chief Executive John McCarvel told analysts on the company's earnings call last month.</blockquote></div><div style="text-align: justify;"><i>The last comment is telling</i>. Consumer confidence and spending IS WAY UP since 2009, and people are buying more junk again. However, consumers want the <i>next big thing</i>, not some shoe they already have in their closet, or already had, and found it made their feet sweaty.</div><br /><br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://o.onionstatic.com/images/9/9959/original/700.hq.jpg?4686" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="280" src="http://o.onionstatic.com/images/9/9959/original/700.hq.jpg?4686" width="400" /></a></div><div style="text-align: center;"><i> This satirical Kelly cartoon from <a href="http://www.theonion.com/">The Onion </a>came out about the time CROX stock peaked.</i></div><br /><div style="text-align: justify;">For every Groupon, ZipCar, Crocs, or other hyped IPO, there is always<a href="http://livingstingy.blogspot.com/2011/03/is-google-good-or-evil.html"> Google</a> - the IPO that keeps the <a href="http://livingstingy.blogspot.com/2012/11/raging-true-believers.html">true believers</a> <a href="http://livingstingy.blogspot.com/2011/07/what-you-choose-to-believe.html">believing</a>. The difference between Google and, say, <a href="http://livingstingy.blogspot.com/2011/06/twitter-new-facebook-what-is-new.html">Twitter</a>, is that Google is a hugely profitable company and has a very rational P/E ratio of 29.69 even though the stock is over $1,000 per share.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">To put that in perspective, if Google had <a href="http://livingstingy.blogspot.com/2012/05/linked-in-next-facebook-to-splat.html">Linked-In's</a> P/E ratio, Google stock would be trading at $25,000 a share.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">CROX, on the other hand, has a very rational P/E ratio of about 12. <a href="http://livingstingy.blogspot.com/2011/05/what-pe-ratio-means-and-what-to-look.html">A low P/E ratio, of course, it not always as good as it sounds</a>. If the company is profitable, people will bid up the stock to a P/E ratio of about 20 or so - as the rate of return mirrors that of the market in general. <a href="http://livingstingy.blogspot.com/2011/12/high-dividend-stocks.html">However, if people are pessimistic about the future of the company, this may bid the stock price down, and the P/E ratio as well.</a> </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But that really isn't of much help to the small investor. People who "invested" in this stock because they liked the shoes, likely got their ass handed to them on a platter. The only folks who made out in this stock are the founders, who used the stock to cash out at least part of their investment, and perhaps the Venture Capitalists, who may turn around the company and make money from it. The big people win, the small people lose. Maybe a few lucky gamblers win - but a hoard of others lose. It balances out.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And this is why, as I get older, I am buying more conservative, <a href="http://livingstingy.blogspot.com/2011/01/dividend-stocks.html">dividend-paying stocks</a> in traditional ventures - companies that actually make things, earn profits, and pay back their shareholders. I don't have to sit and wonder why the company's share price spikes and falls - it is tied to the profitability of the venture, not speculation by the marketplace. And even if the share price fluctuates, I have the consolation of cashing all those nice dividend checks every quarter.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">These may not be "sexy" investments, and the shouting guy on the TeeVee never mentions them. And yes, sometimes<a href="http://livingstingy.blogspot.com/2012/01/problem-with-dividend-stocks.html"> "old line" companies like GM</a> can go bankrupt and wipe out shareholders. But if you held that stock for a number of years, you likely made back your investment in dividends, over time.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I guess the smoke-and-mirrors of non-income stocks is one reason I always sell such stocks when they go up in value. When AVIS spiked from 74 cents to $20, you can bet I sold half of it. When my Access National stock, doubled in value, I sold half of it. Better to get your money back, while you can, than to double-down your bet by seeing how high it will go.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But "bet" is the operative word here. Buying non-income stocks is really just gambling - gambling that some other chump down the road will think the stock is worth even more than you did - even though neither of you have any rational reason to value the stock as you did.<br /><br /><b><u>POSTSCRIPT: Winn-Dixie and Dell</u></b><br /><br />As I noted in an earlier post,<a href="http://livingstingy.blogspot.com/2012/01/bi-lo-buys-winn-dixie-for-lo.html"> I made some money buying Winn-Dixie stock </a>for about $8 a share and then selling it, when it went private, at $12 a share. What made me do this? Well, in the classic sense, I was investing based on familiarity with the brand. I shopped in their stores and just prior to the buyout, Winn-Dixie shed a lot of its manufacturing facilities and poured money into the stores, updating them considerably.<br /><br />So, foolishly, I thought, "Gee, this seems like a good stock" and I got lucky when the buyout came a few months later. <a href="http://livingstingy.blogspot.com/2011/01/struck-by-lightning.html">Never confuse getting lucky with being brilliant.</a> This was a classic "struck by lighting" investment, like<a href="http://livingstingy.blogspot.com/2012/03/lessons-from-avis.html"> my spectacular AVIS buy</a>. But for every Winn-Dixie and AVIS, there is a General Motors, Fleetwood, CREE, or <a href="http://livingstingy.blogspot.com/2010/12/trendy-stocks-why-stock-picking-is-bad.html">Syntroleum</a>. Buying stocks based on the news media is a really bad idea - as I have learned firsthand.<br /><br />When I say buying Pop Stocks is a bad idea, I say this with the authority of having been there and done that - and learning a few painful lessons in the process. Compare the Winn-Dixie stock price chart below with the CROX chart above - they are almost exact matches.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqJ30BIumFMLCl078-mr80gLItm1Hag4CfG0Xl5LvJesxJSdfYN2L8nN2qetE9Vn7vAc-kx9oN0g2L_t5iaA1Wf3uKlbV_0Cj5d8Giz_G5kzsKOLZHJwUYcfpWPHU4KYj6u2RoTTskpW0/s1600/winn-dixit.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="281" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqJ30BIumFMLCl078-mr80gLItm1Hag4CfG0Xl5LvJesxJSdfYN2L8nN2qetE9Vn7vAc-kx9oN0g2L_t5iaA1Wf3uKlbV_0Cj5d8Giz_G5kzsKOLZHJwUYcfpWPHU4KYj6u2RoTTskpW0/s400/winn-dixit.png" width="400" /><i></i></a></div><div style="text-align: center;"><i>Winn-Dixie's Post-Bankruptcy IPO followed a very familiar pattern!</i></div><br /></div><div style="text-align: justify;">When the buyout came, a lot of people who bought at $20 a share and up were upset, as the buyout was for about $12 a share. A few people like me made out well, because we bought at the nadir. We timed the market, but it was more by luck than by design. Never confuse getting lucky with being brilliant. The buyout could have been at $6 - or the company could have <a href="http://en.wikipedia.org/wiki/Winn-Dixie">gone bankrupt <i>again</i></a>.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I still have a trading account with Fidelity (moved over from e*trade) but I do not do a lot of buying and selling of stocks. Why is this? Well, I have a collection of about 50 stocks in that account, and it is sort of like a mutual fund at this point (and often out-performs my actual mutual funds).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Another "Getting Lucky" stock pick was DELL. Why did I buy Dell? Well, people were hammering the stock and claiming that since the company didn't have a presence in the tablet business, it was going to go belly-up in no time. But I thought about it and came to a few conclusions:</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><blockquote class="tr_bq">1. Despite the popularity of tablets, there will always be a demand for real computers. You may be reading this on a tablet, but there is no way I could have TYPED it on one.<br /><br />2. Just because Dell isn't big in the tablet business doesn't mean it never will be. In fact, their new Christmas catalog is chock full of tablets.<br /><br />3. The media hypes Apple as the end-all to creation, even though they have a minority share of the marketplace for PCs, Laptops, Smart Phones, and Tablets. What's more, Apple's market share will again shrink as cheap counterparts to these products become popular.</blockquote></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So I took a flyer on Dell and it paid off. I invested the whopping sum or $2800 and sold out to management for $4125, making about $1325 in the process.. As you can see, I am a big-time "playa".</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Which also illustrates the other half of my philosophy - never place too big a bet on any one stock. And yes, I said "bet" - because when you are buying stocks, as an individual, you are gambling to a large extent. Why? Because no matter how much research you do on a given stock (which is easier today, thanks to the Internet) there are armies of people out there who have done far more research and know a lot more than you or I.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But that is why my stock trading portfolio is less than 1/10th of my overall portfolio - about the same amount I have invested in whole Life Insurance. The rest is in mutual funds and a huge chunk is still in un-mortgaged Real Estate.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">In fact, this trading account originally was invested in mutual funds, and I decided many years ago to roll it over into a self-directed e*trade account, thinking that I could do better than those fund managers - and at least know what I was invested in. The net result was predictable - I invested in a lot of dumb things early on (stuff hyped on the television) and lost my shirt. I also invested in some blue-chip and dividend-paying stocks, which seemed to hold their value more. When my annual dividends came in, it was often enough to buy more stock (which is how I ended up with the Winn-Dixie and Dell stocks, and how I ended up with 50 different stocks in the account). </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">If I had it to do all over again, I am not sure I would do it all over again - or if I did, I would do it differently. However, backward-looking investing is never useful, unless you have a time machine - and mine's broken. So, in reality, you can't go back, and if you did, you'd end up doing the same dumb things. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So if you are going to "play the market" I wish you luck. Diversify your bets and don't put any significant chunk of your portfolio into stock-picking. And if you'd rather just invest in mutual funds, don't feel you are being "left out" of the exciting world of stock-picking and IPOs. Chances are, your mutual funds will do a lot better than your own half-assed picks.</div><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-83575246173783524982013-11-14T09:29:00.000-08:002013-12-13T08:51:59.500-08:00Whole Life Insurance - After 20 years<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFLkEciFPXCFDcreok1x5UoRJJxhzNCIGlJXSISowSEe8bzMckh7GUKySA67rcVAy19d2CVsWZLcPy-kEhVcb4W-jGaF9kSjgBO049v2RobBwAQ50rg_2_V12ZkAqMK9Enj8YBA0fidOA/s1600/nmfn+life.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFLkEciFPXCFDcreok1x5UoRJJxhzNCIGlJXSISowSEe8bzMckh7GUKySA67rcVAy19d2CVsWZLcPy-kEhVcb4W-jGaF9kSjgBO049v2RobBwAQ50rg_2_V12ZkAqMK9Enj8YBA0fidOA/s400/nmfn+life.jpg" width="391" /></a></div><div style="text-align: center;"><i>This plot of cash value versus premiums paid illustrates that life-insurance is a long-term investment, with a payback measured in decades, not years.</i></div><br /><div style="text-align: justify;">Life Insurance - it is a good deal? <a href="http://livingstingy.blogspot.com/2009/10/do-you-need-life-insurance-yes-no-and.html"> I have written about it before</a>, and it is an interesting animal. For a young family starting out, a term policy can be bought cheaply enough - and provide coverage in case a spouse dies young. <a href="http://livingstingy.blogspot.com/2010/06/are-you-over-insured.html">However, as you get older, the premiums become larger and larger</a>. By then, you should have enough set aside in case of early death - and a term policy is no longer necessary.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Whole Life, on the other hand, acts as both an insurance policy <i>and</i> an investment vehicle. The original idea was that you would pay in more than the amount needed for a term policy, and the company would invest the surplus, and eventually a nest egg would build up and the dividends from this would cover the premiums. Your policy would then be "paid up" and you would have to pay no more premiums on the policy.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://livingstingy.blogspot.com/2010/12/convert-to-paid-up-life.html">It is possible to convert a policy to "Paid up" status</a> at any time (provided the policy has a cash value). The policy is basically cashed in, and the cash value used to buy a "paid up" policy, which increases in cash value, over time. The death benefit may be less than the original policy and remains fixed. This is a good option if, later down the road, you don't want to (or cannot afford to) pay premiums - but don't want to lose all of your policy, either.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Speaking of "paid up" - most Insurance Agents will encourage you to use the annual dividend to buy additional "paid up" additions to the policy. These add a little to the death benefit, and generate dividends of their own, which are added to the pile. In one respect, this is like re-investing more money into the policy. In another respect, it is like buying little tiny life insurance policies at a very, very high cost per dollar of coverage. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">It is also possible, of course, to lay out a huge wad of cash and buy a "paid up" policy from the get-go. But most of us can't afford that. Most of us just pay the monthly or annual premiums, one bit at a time, because as salary slaves, we get paid that way.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Is Whole Life Insurance a good deal? Should you apply dividends to reduce premiums, or to buy additional "paid up" additions? How long does it take to pay back what you have invested? Should you buy additions to a policy if they are offered?</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">After 20 years, I finally have some answers to these questions - and I am finally understanding what these policies are all about.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I harp here all the time about <a href="http://livingstingy.blogspot.com/2012/02/buying-investments-you-dont-understand.html"><i>never investing in things you don't understand fully</i>,</a> and to some extent, my Life Insurance investments are an example of this. I did not understand these investments very well at the beginning, and that was a costly mistake, to some extent.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><b>To answer the first question,</b> the general answer is NO - Whole Life Insurance is not really a good deal. You would likely do better investing that money in the Stock Market, or even in Bonds. When you buy a Whole Life Policy, some of that money goes to the death benefit insurance itself (a term policy, basically) and another part goes to the investment portion. Right off the bat, you can see this is not an efficient way to invest. Another portion goes to company overhead and profit (if it is a Stock company and not a Mutual company) so there is an inefficiency there as well (but the same could be said of your Mutual fund company as well, right?).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">It does act as a <i>forced investment scheme</i>, as you have a regular amount deducted from your bank account every month. I chose to keep this amount less than $100 - about what people pay for a Cable TV bill or Cell Phone plan these days. And in that regard, I am glad I spent that money on the Life Insurance, rather than Cable TV. One has paid off, the other would not.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">As a way of <a href="http://livingstingy.blogspot.com/2012/05/its-simple-little-system.html"><i>diversifying a portfolio</i></a>, it is not a bad adjunct to other investments. But I would not put all my money into this one basket - or even a significant chunk of it (Life Insurance, in terms of cash value, represents less than 1/10th of my net worth).</div><div style="text-align: justify;"><b><br /></b></div><div style="text-align: justify;"><b>Should you apply Dividends to Reduce Premiums?</b> YES - always. If you look at the chart above, for <a href="http://livingstingy.blogspot.com/2009/12/my-experiences-with-nml-after-two.html">my Northwestern Mutual policy,</a> you can see that the "crossover" point, where the cumulative premiums become less than the cash value, took about 12 years. Note how the slope of the premium curve decreases after about 2006 - that is when I decided to ignore the advice of my Northwestern Mutual Agent (<a href="http://livingstingy.blogspot.com/2009/12/my-experiences-with-nml-after-two.html">a real piece of work, let me tell you</a>) and apply dividends to reduce premiums. As you can see, this accelerated the time when the policy would pay back - that is, increase in cash value by more than the cumulative premiums.</div><br /><div style="text-align: justify;">The chart below tells a different story. This chart illustrates the same data for Mark's <a href="http://livingstingy.blogspot.com/2009/12/my-experiences-with-nml-after-two.html">State Farm Whole Life policy.</a> </div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEWPGIFnfyU9iSfhmMY6E8qdRDZMjBLH2fO18aF-sSZprZxNYDDBJcT9a6HzCSbEp7GFqVwx_MA8vfVg-X25Ivz0w0zVICfNkJRVxL9KqRJxz_VBvjuF0b40ddFfDIZ_YbnQKn-DzAKYs/s1600/state+farm+life.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEWPGIFnfyU9iSfhmMY6E8qdRDZMjBLH2fO18aF-sSZprZxNYDDBJcT9a6HzCSbEp7GFqVwx_MA8vfVg-X25Ivz0w0zVICfNkJRVxL9KqRJxz_VBvjuF0b40ddFfDIZ_YbnQKn-DzAKYs/s400/state+farm+life.jpg" width="390" /></a></div><br /><br /><div style="text-align: center;"><i>This State Farm policy has taken longer to pay back its premiums, largely because we didn't apply dividends to premiums early on. Underlying performance of the company is also an issue, although as illustrated here, State Farm has exceeded its guaranteed values</i></div><br /><br /><div style="text-align: justify;">Here, I did not use dividends to reduce premiums until about 2009, and as you can see, once I did, the slope of the dividend curve decreased and crossed the cash value line that much sooner. This chart differs from the one above in that it illustrates the guaranteed values from the State Farm Policy, whereas in the Northwestern chart, I projected cash value over time.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">These charts illustrate graphically how using dividends to decrease premiums really is the way to go. Your payback, in terms of cash value exceeding total premiums paid, will accelerate. Buying additional "paid up" insurance with your dividends may increase the overall size of the policy over time (in terms of both cash value and death benefit) but it also means that this crossover point (where cash value exceeds the amount paid in) will take longer - or may never occur. Note how the slope of the two lines in the graph above is nearly identical - until I opted to apply dividends to premiums.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">At this point, both policies are worth more than I paid for them. The Northwestern policy clearly is the winner - returning an average pf about 2.9% a year over 20 years. That doesn't sound very good right now, but at this point, every dollar I pay into the policy increases the cash value by two dollars - a return of 200%. So at this stage in the game, it pays to hang onto the policy. The overall rate of return will increase from here on out.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The State Farm policy is not doing as well - returning a pathetic 0.21% on the premiums paid since inception. But like the Northwestern Policy, at this point, every dollar put into it increases the cash value by two dollars. From here on out, it is worth keeping, and the overall rate of return will go up over time.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Bear in mind there are two other aspects of Whole Life I have not addressed here. First, there are some tax advantages to Life Insurance. You can structure the policy such that you can borrow against it when you retire, and thus have no tax consequences at all (when you die, the policy pays off the loan). </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Second, there is the death benefit. Both policies have death benefits over $100,000. So in addition to getting an investment vehicle, you are getting a term policy thrown in - but a term policy that will never expire, as long as you live.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><b>How long does it take to pay back what you have invested? </b> As you can see from the charts above, this depends on whether you apply dividends to reduce premiums or not. If you do, the payback will be more rapid - perhaps as little as ten years. If you do not, you might wait forever.</div><div style="text-align: justify;"> </div><div style="text-align: justify;"><b>Should you buy additions to a policy if they are offered?</b> No. Our State Farm policy had a provision allowing us to buy $25,000 additional policies at five year intervals - up to four such policies. These policies were worth less than the original policy, but cost far more in terms of premium for insured amount, as the rates for the insurance part were higher (we were older, so the risk of death is higher) and since you are re-starting the clock on these new policies, they remain "upside down" for several years. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">You need less and less insurance as you get older, so buying more makes no sense - except in one circumstance. These add-on polices required no medical exam. So, if I was diagnosed with terminal cancer, then yes, I would have bought these polices - they would be a sure bet. Other than that? <i>Walk away</i>.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And that illustrates why <a href="http://livingstingy.blogspot.com/2011/05/life-insurance-over-50-hell-no.html"><i>Life Insurance for Older People</i> is such a costly mistake. </a> Many folks wait until they are 50 and then think "Gee, can I buy Life Insurance?" </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And the answer is "Yes..." but the complete answer is, "....but it is a rip-off". Insurance companies aren't dumb, and you can't get $100,000 of coverage, at age 50, for any trivial amount. Even a term policy will be costly, as you are closer to the age of death and the odds of you dying are huge.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">When you see an ad for "Life Insurance for Seniors! No medical exam necessary!" just <i>walk away</i>. Why? The Life Insurance companies are not giving out<a href="http://livingstingy.blogspot.com/2011/11/free-ponies.html"> free ponies </a>this week - or next. You can't get something-for-nothing, so <i>stop looking for it</i>.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><b>Life Insurance is a Young Man's Game. </b> If you are in your late 20's or early 30's and have a steady job and are thinking about long-term investments, a modest policy with an affordable premium is not a bad option. We bought our policies in our early 30's, and that is about as late as you want to buy. It is a long-term investment that takes <i>decades</i> to pay off. You can't buy whole life at age 50 and hope to make out at all.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Do I regret buying these policies? <i>Yes and No.</i> Yes, I regret not applying dividends to reduce premiums. I regret buying the "add on" policies from State Farm (which I have since cancelled or cashed in). And I regret buying the additional Adjustable and Variable Life policies sold to me by my Northwestern Agent (which I have since converted to <i>paid up</i> policies)</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But, in terms of a $99-a-month expense, I am glad I bought these polices instead of having 500 channels of Cable or a new leased car. Some folks say saving money may be for chumps, but in the end, the person with money saved - no matter what the rate of return (provided it is not negative) - ends up ahead.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">As the projections on these polices show, by the time I am retired, each will be worth about $50,000 or more, in terms of cash value. That's over $100,000, not counting the two other <i>paid up </i>policies I have, which will add another $100,000 to the pile. This is more than the average American <i>retires with</i>, these days.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I also think that one advantage of these policies is that they got me to<a href="http://livingstingy.blogspot.com/2011/01/importance-of-net-worth.html"> think about my net worth</a>, my overall estate, and where my financial life was heading. Life Insurance is a long-term investment, where you pay a little in at a time for a long period of time, with a payoff decades in the future. Having these policies forced me to think about my investment strategies and to invest more in my IRAs and 401(k) plans.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Looking back 20 years, I am glad I saved money over time - and wished I had saved more. There are a lot of people in this country, older than I am, who have saved <i>nothing</i> and are headed for retirement, whether they want to or not. And that is both scary and sad.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><br /><!--[if !mso]><style>v\:* {behavior:url(#default#VML);} o\:* {behavior:url(#default#VML);} w\:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} </style><![endif]--><br /><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:DoNotOptimizeForBrowser/> </w:WordDocument></xml><![endif]--><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"></span>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-87750119745016566762013-11-08T14:25:00.000-08:002013-12-13T08:51:59.509-08:00Another Day, Another Self-Serving IPO<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4aUxJoW-IsWB1qKtBjL77sP8Tu59z-yqKojgKmxyO5jOTWV686nVwm-joCWr2q-WGj1f9fFtbog5o2XjxmWtXot_TUVszkbuS-1WA8D5DBcPDoLODPrHQwtWyJx97RyMnb43lGX3Rsjs/s1600/twitter.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4aUxJoW-IsWB1qKtBjL77sP8Tu59z-yqKojgKmxyO5jOTWV686nVwm-joCWr2q-WGj1f9fFtbog5o2XjxmWtXot_TUVszkbuS-1WA8D5DBcPDoLODPrHQwtWyJx97RyMnb43lGX3Rsjs/s400/twitter.png" width="400" /></a></div><br /><div style="text-align: center;"><i>The Twitter IPO had the desired "pop" they wanted. Who does this profit? Not you.</i></div><br /><br /><div style="text-align: justify;">Another day, and another self-serving dot-com IPO hits Wall Street. As I wrote before in <a href="http://livingstingy.blogspot.com/2011/04/nature-of-ipos.html"><i>The Nature of IPOs</i></a>, particularly the dot-com kind, the whole purpose of a moden IPO is to <i>make the founders wealthy.</i></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">How does this work? Simple. But first let's review what IPOs were and what they have become.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">In the good-old-days of Corporate America, you did an IPO to sell stock to <i>fund your company</i>. The IPO provided capital for investment in machinery and materials, so you could build cars or make steel, or whatever - ventures that required a lot of capital to start. So you sold off a good chunk of your company to make money. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Alexander Graham Bell (no relation) had to sell off more and more of his stock, over time, to investors, in order to raise capital to make phones (which were leased, not sold). In the end, he owned less than 5% of the company - and his wife sold half of that in a panic when the stock price spiked. He still ended up rich, but not as rich as he could have been.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Today's IPOs are a different beast. Yes, they <i>sell you the story</i> that they are doing the IPO to raise capital for investment. But it is a bullshit story. Instead of selling off 95% of the company to raise money, usually they sell off only 4-5% of the company (read that again - <i>four to five percent</i>!). And they don't "need" the money to "expand their business" as the amount raised in the IPO is often trivial compared to the amount of cash on hand.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">In fact, with today's IPO's they <i>leave most of the money on the table</i> by allowing the stock to "pop" in price on the first day. What does this "pop" mean? It means that institutional investors and others who "subscribed" to the shares at the opening price can immediately sell their shares for nearly double the money. They make as much money, in one day, as the company "raises" in Capital.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">If this were an old-fashioned IPO, people would scratch their heads and say, "That makes no sense! How are you going to raise the most amount of money to build your steel mill if you let some banker take half of it?"</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And in the days of steel mills, that argument made sense. But we aren't building a steel mill, we are building a bullshit mill. And we really don't care whether the company "raises capital" because a bullshit mill doesn't NEED capital. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">What it needs, or more precisely, the FOUNDERS need, is a way to "cash out" of their investment in the company. They are paid in stock (or invested and got stock in return) and they want to sell it as a regulated security on the open market, where chump investors in the general public will pay top dollar to "invest" in "the next big thing!"</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So they hope the stock price spikes - which is bad for the company, as it means the company left money on the table - because it is good for the INDIVIDUALS who started the company. In other words, what is a direct detriment to the company, profits the people running it. And these are the people running the company that you are "investing" in - right?</div><div style="text-align: justify;"></div><div style="text-align: justify;"></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text"></span></div>OK, so the Twitter IPO is a day old now. What happened?<br /><blockquote class="tr_bq"><span class="j-text">1. The people who got subscriptions to the stock at $26 a share sold out at $45 to $50 a share and made a ton of money. This was not you and me, but institutional investors and big money players.</span></blockquote><div style="text-align: justify;"><blockquote class="tr_bq"><span class="j-text"></span></blockquote><blockquote class="tr_bq"><span class="j-text">2. The insiders in the company, who are paid in stock, now are worth Billions, at least on paper. To cash out, they will have to sell their shares, over time. Most are locked out from selling for 180 days. Wait until that day comes....<br /> </span></blockquote><blockquote class="tr_bq"><span class="j-text">3. The small investor bought at $45 a share and up on the first day. Some paid as high as $50 a share!<br /> </span></blockquote><blockquote class="tr_bq"> 4. We are ONLY ON DAY TWO and the stock has tanked by 7.24% from its close yesterday. That's a heck of a drop from the pop! A few more days of this, and it ain't gonna be pretty.</blockquote><blockquote class="tr_bq"><span class="j-text"></span></blockquote><blockquote class="tr_bq"><span class="j-text">5. If you were unfortunate enough to pay nearly $50 a share (as some did), your shares are now worth about $41. You just lost 18% of your investment, overnight.<br /> Gee, wish I invested in that IPO.</span></blockquote></div>Will Twitter tank as well? Let's look at a brief history of some famous hyped IPOs of the last few years:<br /> <br /><br /><div style="text-align: justify;"></div><div style="text-align: justify;"><b>1. Groupon:</b> Groupon went public with the same amount of hoopla and the same vaunted "Market Cap" as Twitter. The stock then tanked about a year later and the founder and CEO was forced out. He was so upset by this, he wrote a sardonic resignation e-mail. You see, he has more money that God, now, and being fired means only that he can now spend it at his leisure.</div><br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDZcMDSkSFafP3r-2KIZ875rrrHWiNKJ37BRni20y_eWvy0-BkYtflWFi-ZhArZ3N6K2XtFOFWtQLJmGF6MSNLVfVqPEOC7chQk4dLj7y-ekwlTEiKynJMLqd8H_zBvM9CwcSIVSrmm0o/s1600/grouponchart.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDZcMDSkSFafP3r-2KIZ875rrrHWiNKJ37BRni20y_eWvy0-BkYtflWFi-ZhArZ3N6K2XtFOFWtQLJmGF6MSNLVfVqPEOC7chQk4dLj7y-ekwlTEiKynJMLqd8H_zBvM9CwcSIVSrmm0o/s400/grouponchart.png" width="400" /></a></div><br /><div style="text-align: justify;"><br />Groupon's model was copied by others and the product turned out to be a fad. The share price is rising in recent months, but the company is still losing money (-14 cents a share). Where is this going?<br /><br /><br /><b>2. ZipCar:</b> ZipCar at least sold a physical product - car rentals - and was more than a mere website. Problem was, car rentals are a capital-intensive business, and a costly one as well. ZipCar never made any money to speak of, and the stock price tanked, after the IPO. Again, look at the chart below and the cart above - do you see a pattern here?<br /><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5p_3Z_MzkDBPvJ0MiGQHayWPV-LS8TfJYRLk5GMgxIPEqIOaf7XezHGcbPJbwYxHpC_F7dBnXFmlh2agCQj-yFX6X44nHEjfWMObDMuXQqn3Nm7MB9w3_Ppa1O0bk7YvAg6Dl15RnwUU/s1600/zipcar+chart.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="336" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5p_3Z_MzkDBPvJ0MiGQHayWPV-LS8TfJYRLk5GMgxIPEqIOaf7XezHGcbPJbwYxHpC_F7dBnXFmlh2agCQj-yFX6X44nHEjfWMObDMuXQqn3Nm7MB9w3_Ppa1O0bk7YvAg6Dl15RnwUU/s400/zipcar+chart.jpg" width="400" /></a></div><br /><div style="text-align: justify;">AVIS finally bought ZipCar for a fraction of its IPO price. And they probably did this just in time to prevent ZipCar from going bankrupt (why else would ZipCar management sell?). Unless you bought the stock just before the AVIS purchase, you lost out. <br /><br />Bottom line on ZipCar: The small investors who bought at the IPO price lost their shirts - again in a market where the DJIA was skyrocketing. Are IPOs a great investment? No.<br /><br /><br /><b>3. Zynga:</b> Zynga was another dot-com stock that went ballistic at the IPO, largely because of the anticipation of the Facebook IPO. But like Facebook, it did a face-plant as well:</div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDPLaYB1yQKUHaAL8bavZnNRRMoxm6M5bBvKrlBF7myikU_KTGyRiNNKTK6U920thIHP2kYvg7cR_2iaHCqmHgOyTpZQn4gOhO0PYU5ZU5L8_wOGNo-PNw6nR1XfBRHPCgG_3u_Qo_534/s1600/zynga.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDPLaYB1yQKUHaAL8bavZnNRRMoxm6M5bBvKrlBF7myikU_KTGyRiNNKTK6U920thIHP2kYvg7cR_2iaHCqmHgOyTpZQn4gOhO0PYU5ZU5L8_wOGNo-PNw6nR1XfBRHPCgG_3u_Qo_534/s400/zynga.png" width="400" /></a></div><br /><div style="text-align: justify;">Zynga made games like "Farmville" (remember THAT?) and people lost interest in the games. Unlike ZipCar and Groupon, there has not been a "bounce-back" as of yet. If you bought at the IPO price, you got creamed on this one.<br /><br />Again - and this is important - it is very hard to make money by buying a stock and then having it lose more than half its value. And with no profits (and no dividends) there isn't even income to fall back on.<br /><br /><b> 4. Facebook:</b> Facebook is one success story of the lot (sort of), even with the "botched" IPO. But whether this makes any sense as a long-term investment remains to be seen. Facebook is showing profits, finally, of 41 cents per share. This gives it, at the present share price, a P/E ratio of 116.<br /><br /></div><div class="separator" style="clear: both; text-align: center;"><span class="j-text"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEaQyLhlakDn1q4PEd5Cnret2NMHDhORq88eAcB-aHgEICytb-BJWps36NbIW1j0mUnwv8Fm3epJ0ugA1r1AWEcxpiqvuPzA0UNuyzLYqzrHKmGehjahwgZsi_kHUE6U9BIGEl9u3IlbQ/s1600/facebook+chart.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEaQyLhlakDn1q4PEd5Cnret2NMHDhORq88eAcB-aHgEICytb-BJWps36NbIW1j0mUnwv8Fm3epJ0ugA1r1AWEcxpiqvuPzA0UNuyzLYqzrHKmGehjahwgZsi_kHUE6U9BIGEl9u3IlbQ/s400/facebook+chart.png" width="400" /></a></span></div><span class="j-text"></span><span class="j-text"></span><br /><div style="text-align: justify;"><br />Is that a good P/E ratio? Some analysts like to say things like "Well in the tech sector" (as if a website was 'tech') "a P/E ratio of 100 to 200 is acceptable."<br /><br />But P/E ratio represents the number of years you'd have to wait to make your money back on this stock. In other words, 116 years. Facebook is profitable, yes, just not that profitable. In order to show a more reasonable P/E ratio, Facebook either has to increase profits by a factor of five, or the share price has to decrease by a factor of five. You pick.<br /><br />Since it has little in the way of profits, and little in the way of assets, there is no "there" there in the company. You have to hope that someone dumber than yourself will pay even more for the stock, over time. It is possible that someone could "buy the company" but at these prices, no one could afford to.<br /><br />The Facebook experience shows that profits do matter. Facebook's IPO face-planted largely because the profitability of the company was in question. Once the profits went up, so did the stock price. Twitter, losing 30 cents a share, better figure out how to make money - and fast.<br /><br /><br /></div><div style="text-align: justify;"><b>5. Linked In:</b> LinkedIn is the darling of the dot-com investors. Why? Because the share price has soared and the company actually makes a profit, albeit not a large one. Yea, Linked-In is making 30 cents a share. But at the current share price, that yields a P/E ratio of over 700. That's scandalous.</div><span class="j-text"></span><span class="j-text"><br /></span><br /><div class="separator" style="clear: both; text-align: center;"><span class="j-text"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4b4tLTnRuQs9duRx4ML-AeLx4s4Qgg7E_-CYMERteSDMbKaZB7DAm_iwZkNJqoy0zSU0tkL3N2QFrTsbt5JTBvXgGRSx09JYGj03SaEohqolX-vzCHwkzybcL4iAjp9W1WtDLuLpXMpA/s1600/linked.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4b4tLTnRuQs9duRx4ML-AeLx4s4Qgg7E_-CYMERteSDMbKaZB7DAm_iwZkNJqoy0zSU0tkL3N2QFrTsbt5JTBvXgGRSx09JYGj03SaEohqolX-vzCHwkzybcL4iAjp9W1WtDLuLpXMpA/s400/linked.png" width="400" /></a></span></div><span class="j-text"><br /></span><br /><div style="text-align: justify;"><span class="j-text">People who pay that much for a stock are "buying ahead" just as home buyers in the late 1980's and 2000's did - banking on rising prices to make their overbidding a good investment later on. But eventually, LinkedIn is going to have to make a profit that justifies its share price - or the share price will have to tumble to provide a more realistic P/E ratio. At a P/E ratio of over 700, LinkedIn is nearly seven times higher than Facebook. Where is this going? Do you think that LinkedIn can grow profits by a factor of 10-20?</span><br /><br /></div><div style="text-align: justify;"></div><div style="text-align: justify;"></div><div style="text-align: justify;"><span class="j-text">Buying Facebook or LinkedIn is an act of faith - <a href="http://livingstingy.blogspot.com/2008/12/faith-based-investing-defying-laws-of.html">and faith-based investing is a bad idea</a>. You are gambling that someone else will pay even more money for the stock down the road, based on the idea that it is "worth" more, even though the profitability of the company is tiny compared to the share price. </span></div><div style="text-align: justify;"><br /><span class="j-text">In other words, you are waiting for a greater fool than yourself to buy the stock.</span></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text">Is it possible to make money from these IPOs? Yes and No. Yes, it is theoretically possible if you can <i>time the market</i>, but timing the market, without a <i>working time machine</i> is nearly impossible to do. It is also possible if you <i>get lucky</i> and a stock, like Linked-In takes off despite its dismal metrics.</span></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text">But for the small investor, this sort of gambling is never a good idea. Why? Because for every <i>Linked-In or Facebook</i>, there is a <i>Zynga or Groupon or Zipcar</i>. In fact, the stinkers outnumber the winners, every time. And even the winners here, as suspect.</span></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text">And picking winners is never an easy task. <a href="http://livingstingy.blogspot.com/2011/01/first-to-market-is-often-last-in.html">First to market is often last in the marketplace</a>. And in the Internet world, a year or two is a lifetime. A decade is a Century. Few remember today, <a href="http://livingstingy.blogspot.com/2012/12/the-lessons-of-aol.html">the fate of AOL</a> - which was once American's premiere online portal. At one time, it seemed like half the country was on AOL. They even bought Time-Warner, they had so much money - at least on paper.</span></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text">And then it went bad. Not overnight, and not suddenly. But eventually, other means of accessing the Internet came about. No one wanted to use AOL KEYWORDS anymore, but would rather search using something called "Google". AOL faded from view and Time-Warner extricated itself from the wreckage.</span></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text"><a href="http://livingstingy.blogspot.com/2012/05/real-investing-versus-fake-investing.html">Gambling your retirement on trendy, hyped stocks is just not a good idea</a>. Diversify your portfolio, invest in a number of different things. And as you get older, invest in more conservative investments, as you can't afford to gamble on IPO stocks.<br /><br />Tech stocks and dot-com stocks are very volatile - and usually over-valued. Investing in the tech sector is not for the faint of heart - or the small investor. </span><span class="j-text"></span></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text">Will Twitter be the next Facebook? Or Linked-In? Or Groupon? It is hard to say. And it is hard to predict how long even the successful dot-com stocks will keep being successful. If you look at the metrics on Facebook and Linked-In, they make no sense at all.</span></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><span class="j-text">And as a simple rule of thumb, it never pays to invest in <a href="http://livingstingy.blogspot.com/2012/02/buying-investments-you-dont-understand.html">something you don't understand.</a></span></div><div style="text-align: justify;"><span class="j-text"></span><br /></div><div style="text-align: justify;"><span class="j-text"></span><span class="j-text"><br /><br /><br /><span class="j-text"></span><br /><span class="j-text"><span class="j-text"> </span></span></span></div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-40063105022986259262013-11-02T07:29:00.000-07:002013-12-13T08:51:59.598-08:00Satellite Radio<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJ-KQNBktTsAR54l61BH4XZKWc4fBbdj3_llf2SVl1WIssTeaa-2jbjOLEde1na8bge7NaBXTDWEbb8AE5T1fpi2dMx_5Mjsx-5gS034jY3-zMNhDSuZnTInRr-8_8aCT9S9U9SjP3Wkk/s1600/sirius-radio.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="121" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJ-KQNBktTsAR54l61BH4XZKWc4fBbdj3_llf2SVl1WIssTeaa-2jbjOLEde1na8bge7NaBXTDWEbb8AE5T1fpi2dMx_5Mjsx-5gS034jY3-zMNhDSuZnTInRr-8_8aCT9S9U9SjP3Wkk/s320/sirius-radio.jpg" width="320" /></a></div><div style="text-align: center;"><i>You can tell a lot about a company by how easy it is to contact them.</i></div><br /><div style="text-align: justify;"><br /></div><div style="text-align: justify;">A friend of mine recently signed up for Sirius Satellite Radio. Why is this? Well, his favorite radio station switched from "oldies" to "country" and that means that the only radio stations we can get now are (1) Jesus - the hateful kind, (2) Country - the new bad kind, (3) Hispanic, and (4) two NPR stations that barely come in (blasted off the air by the hateful Jesus stations, which over-modulate).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">If I was the kind of person who believed in <a href="http://livingstingy.blogspot.com/2009/01/conspiracy-theories-other-time-wasters.html">Conspiracy Theories</a> (but I don't) I would think that Sirius had bought up all the radio stations in the country and intentionally switched them to odious formats so you would have to pay extra for satellite radio service.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Anyway, my friend, fed up with this, decided to go satellite, and he claims he called the XM people and they signed him up for $4.89 a month for six months. If this is true, then he got a steep discount off their advertised price of $17 a month or so.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">But never confuse "savings" with "savings". Reducing the price of an unnecessary expenditure is not creating wealth, just dissipating it more slowly. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And yea, $17 a month is a lot of money. $17 a month, invested at 7% over a 45 year working life, comes to $62,373.36 at retirement time. A little here, and a little there, and pretty soon you are bleeding to death from 1,000 cuts. <a href="http://livingstingy.blogspot.com/2010/12/subscription-model.html">And that is the nature of subscription services and <i>subscription fatigue.</i></a> You sign up for more and more of these types of services, and pretty soon - very soon - you are spending hundreds and hundreds of dollars a month, on "services" which are not essential to your daily life.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">It pays to limit the number of recurring charges in your life to the bare minimum. Small fees like $17.95 (which is seventeen dollars and not eighteen, right? And certainly not close to twenty!) add up, cumulatively and over time. People look for large chunks of "waste" to cut in budgets - whether personal, business, or even governmental. <i>The real solution to cutting waste from a budget is to cut a little here and a little there - because the big things can't be cut, only whittled down.</i> </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I met a young man the other day who confessed he spend <a href="http://livingstingy.blogspot.com/2011/10/new-smart-phones-are-here.html">the whopping sum of $200 a month on his smart phone.</a> He was 25 and fresh back from Afghanistan. I tried to explain to him that $200 a month, invested over a working life could be a quarter-million dollars in retirement funds, and he gave me a blank stare. I didn't have the heart to tell him about the money he was squandering <a href="http://livingstingy.blogspot.com/2010/12/tricked-out-dodge-neon.html">trying to "hop up" a 2005 Dodge Charger.</a> Kids that age, just want to spend it all. And it all seems so important back then.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><i>But I digress.</i></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Anyway, I was intrigued that Sirius would cut their rates so much. I went on the website to check this out, but all I found were sign-ups online, and no discounts offered. In fact, most of the gags were <a href="http://livingstingy.blogspot.com/2008/12/scams-and-how-to-identify-them.html">'negative option' offers</a>, where you get "30 days free" service (and we all know that <a href="http://livingstingy.blogspot.com/2012/02/free-isnt.html">FREE isn't</a>, right?) so long as you provide a credit card number - so they can bill you perpetually.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Tellingly, there was no telephone contact number listed, other than on a help page. I tried calling that number, but got only a DTMF telephone tree. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">When a company makes it hard to contact them, you know where this is going to go.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I did find a page where you can submit a <i>request</i> for them to contact you. Obviously, their time is more important than yours! You see how they are power-shifting here.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The entire website was so chock full of flashy animation and distracting graphics, as well as large come-on prices and <i>fine print details</i> that it was impossible to really figure out what the real "deal" or bargain was. What are you paying and what are you getting? You have to sign up to find out. And that means giving them your credit card number.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Negative option sign-up techniques are never a good idea. You sign up for a "Free 30 day trial" and if you don't cancel in time, your credit card is charged. If you call to cancel, they claim never to have received your call. And so on and so on.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://livingstingy.blogspot.com/2012/12/the-lessons-of-aol.html">AOL tried this technique</a> in the past (google it). <a href="http://livingstingy.blogspot.com/2010/08/angies-list-what-waste.html">People complain about Angie's List</a> for the same reason. Companies claim to have not gotten the message that you wanted to cancel, so they keep charging your account. <i>And many Americans never bother to check their credit card statements or accounts, so they don't notice - until months have past!</i> So after three months, they realize their subscription wasn't cancelled, and they call, yet again, to start the process over. <i>Guess what happens then?</i></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://livingstingy.blogspot.com/2011/01/wither-aol.html">As I noted in another article (citing a New Yorker article)</a>, AOL is kept afloat in large part because a number of people still pay the dial-up subscription fee, month after month, even though they use a cable modem or DSL or whatever. People think that they still "need" AOL to get online.<i> </i></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">As you can see, the "subscription model" is very lucrative for businesses!</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">(By the way, it strikes me that the phrase "Like us on Facebook!" which seems so prevalent today, will someday seem as quaint as "AOL Keyword:" was in 1995. What seems ubiquitous and permanent in the online world, evaporates like ether in a matter of months).</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The point is, every time you sign up for a subscription, you put a little hole in your rowboat. Not a big hole, but one nevertheless. And if you can't plug this hole - or keep track of it - then your rowboat is going to require more and more bailing, over time.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">My friends are very excited about XM radio, and how cheaply they were able to get it. They claim that they paid for a six-month subscription, and when it ends, they can negotiate another six months, at the same price of less than $5 a month.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I will wait and see how this works out for them. But frankly, I am skeptical. I suspect what will happen is that after the six month period (or even before) they will find a nasty little charge of $17.95 on their credit card, and they will spend hours and hours on the phone trying to straighten it all out.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And if you can get satellite radio for $5 a month, why don't they advertise it for everyone at that price? </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://livingstingy.blogspot.com/2010/12/gut-instincts.html">I tend to go with my gut instincts</a>. And the Sirius website has all the charm of a <a href="http://livingstingy.blogspot.com/2011/04/snake-oil-salesmen.html">carnival barker.</a> Simply put, <i>I don't trust them</i> - and why should I? After all, by now, we are all aware of how these marketing gags work. <a href="http://livingstingy.blogspot.com/2012/03/rule-of-thumb.html">The splashy ads and fine print say it all </a>- pay no attention to the man behind the curtain!</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So, no Sirius satellite radio for me. Why?</div><div style="text-align: justify;"></div><blockquote class="tr_bq"><div style="text-align: justify;">1. I am punching an unnecessary hole in my rowboat - for a trivial reason.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">2. I will have to dick around with these negative-option cancellation deals. Not worth the stress!</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">3. The carnival barker atmosphere of their website is like <i>police tape </i>roping off a bad deal.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">4. I tried this service once in a rental van, and frankly, I thought it sucked. 100 sports channels, 100 talk channels, and then 50 music stations playing things you probably don't want to hear, anyway. In other words, I didn't think the service was worth much. Even when FREE, we listened more to our iPod or CDs or over-the-air radio. <i>That is telling</i>.</div></blockquote><div style="text-align: justify;"></div><div style="text-align: justify;"></div><div style="text-align: justify;">With the advent of Music over the Internet (Pandora, etc.) which you can stream through your smart phone or whatever, the XM model may become obsolete in a few short years. Their huge cost structure (satellites, programing, etc.) is an inherent disadvantage (Pandora does not have to pay for cell phone towers).</div><div style="text-align: justify;"></div><div style="text-align: justify;"></div><blockquote class="tr_bq"><div style="text-align: justify;">"In the fourth quarter of 2009, Sirius XM posted a profit <i>for the first time</i>, with a net income of $14.2 million. This came after net losses of $245.8 million in the year following the merger. The company’s resurgence was owed in part to the loan from Liberty Media. Increased automobile sales in the US was also a factor. Sirius XM ended 2009 with 18.8 million subscribers.<sup class="reference" id="cite_ref-nyt022510_40-1"><span></span></sup></div></blockquote><blockquote class="tr_bq"><div style="text-align: justify;"> By the end of 2012, Sirius XM’s subscriber base had grown to 23.9 million, mostly due to an increase in partnerships with automakers and car dealers; a strong push in the used-car market; and continued improved car sales in the US in general. The renewal of radio show host Howard Stern’s contract through 2015 ($400 million for five years, $100 million less than Stern’s previous five-year deal) was also a factor in the company’s steady growth; Stern’s show attracts over 12 million listeners per week"</div></blockquote><div style="text-align: justify;"><br /></div><div style="text-align: justify;">In other words, Sirius hemorrhaged cash for many years (particularly since it competed with XM radio, until the two merged). They are now starting to make money, only because a large installed base of radios is out there. Problem is, of course, if you have two cars with Sirius radios, you need two subscriptions. And if you want to use Sirius in the house, you need another radio there, another subscription, and an outdoor antenna with a sky view. It is not like listening to "radio" off the air. And not like Internet Radio (or streaming) which will play on any device you own, with one user account.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://www.cnbc.com/id/100910362">This CNBC report </a>shows that revenues are up, but overall profits have dropped, slightly. I think in the short term, as more and more Sirius/XM equipped cars enter our national fleet, they have the potential to increase their subscriber base. But the real threat to their business is the smart phone, which with bluetooth, (or even a hardwire connection) can stream content to a car radio, house radio, or just ear buds - at a cost far below that of Sirius.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">So, not only will I not be getting the service, <i>I won't be buying the stock, either</i>. Long-term, their business model looks to be flawed, unless they can get the price down and greatly boost the number of subscribers. As Mark put it, even at $5 a month, it wasn't worth it, if all we could do is listen in <i>one car</i>. (I sarcastically offered to leave the car door open in the garage so he could hear it in the house. But of course, that wouldn't work without a clear sky view). </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">And as Americans drive less and less (fewer of us will commute in the future) fewer people will think paying nearly $20 a month to listen to the radio is a worthwhile bargain. It will be interesting to see how this plays out, over time. Remember <a href="http://en.wikipedia.org/wiki/Iridium_Communications_Inc.">Iridium?</a></div><br /><br /><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-13945468858000692992013-10-29T21:39:00.000-07:002013-12-13T08:51:59.685-08:00Dealer Installed Options and Adminstrative Fees - the latest gag.<div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><h1 class="page-header listing-title" style="text-align: center;" title="2013 Nissan Frontier SV Jacksonville, FL 32225"><span style="font-family: Arial,Helvetica,sans-serif;">New 2013 Nissan Frontier SV $26,750**</span></h1><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhw1vK-hyjpy4V2M1xM9Z3tzSjxOAvLPY5MqHuCL_8Ko06BLtirbabx-p-CXXKVorv90aVX9_c6IBOCBOO9m3xTefNosC4JEAdwFKvwFAyPSlLYKmyZbISpRibMwXaZEmlbHxTnq-XxgmQ/s1600/nissan.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhw1vK-hyjpy4V2M1xM9Z3tzSjxOAvLPY5MqHuCL_8Ko06BLtirbabx-p-CXXKVorv90aVX9_c6IBOCBOO9m3xTefNosC4JEAdwFKvwFAyPSlLYKmyZbISpRibMwXaZEmlbHxTnq-XxgmQ/s400/nissan.jpg" width="400" /></a> </div><div class="atcui-section atcui-clearfix atcui-small " id=""><span class="atcui-section-title"> </span></div><div class="atcui-section atcui-clearfix atcui-small " id=""><span style="font-family: Arial,Helvetica,sans-serif;"><span class="atcui-section-title">**<u>Disclaimer:</u></span> <span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">Prices plus tax, tag, <i>dealer installed options</i> and fees including $55 private tag agency fee and $599.00 pre-delivery service fee</span></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id=""><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id=""><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"><a href="http://livingstingy.blogspot.com/2012/01/new-car-trap.html">Buying a brand-new car is never a good idea.</a> Things like "Internet Pricing" and pricing services like Kelly Blue Book (KBB), Edmunds, and TrueCar, would seem at first to level the playing field for the consumer. </span></span><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">People like to think they can outwit a dealer this way, but dealers are constantly coming up with new "gags" to pad and obscure the price of a car.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">The latest "gag" the Auto dealers are using to <i>hide the cost of a car</i>, is to add on "Dealer Installed Options" to confuse you about pricing and to pad the price of the car.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">For example, the car shown above is advertised for $26,750. This sounds pretty cheap, until you realize that you can use any online price service, such as TRUECAR to drive down the price considerably - to about $23,147, which of course is a lot better.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">So you call the dealer and he says, "Come on down!" and you think, reasonably, that the price of the vehicle is $23,147. This includes the list price minus any incentives, rebates, markdowns, etc., plus the cost of shipping.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">Of course, there are the normal "<a href="http://livingstingy.blogspot.com/2012/12/hidden-costs-of-car-buying.html">hidden costs" of buying a car</a>, such as sales tax, and titling fees, which come to $1700 in my State. So $23,147 is now $24,847. OK, still a cheap car under $25,000.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">But the dealer adds in a "$599 administrative fee" - some call it "document prep" or "vehicle preparation" - basically profit to cover their overhead of washing the car for the nice photos and to pay for secretarial help. <a href="http://blog.truecar.com/2009/06/01/which-additional-fees-should-i-pay-at-the-car-dealer/">Some websites suggest you should not pay this fee</a>, or at least negotiate it down:</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;"><span style="color: white;">_</span><br /> <span style="color: white;"> <span class="pibfi_pinterest"> <img alt="03adminfees" class="alignnone size-full wp-image-716" height="196" src="http://blog.truecar.com/wp-content/uploads/2009/06/03adminfees.jpg" title="03adminfees" width="589" /> <span class="xc_pin" style="display: block; left: 509px;"> </span> </span></span></div><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsL4-e6gxlr3dxvNjjV5BHEPu8B1WjkvtfUz89j_KEs85SmxyFT7XJ83G8KnYIW6Ito1OGqaTbVfCJPXx6irUBUB9G28oRkAPGVa-LmafL5R74LJa4nvKSGeZKSA5w4sIzP4cFs9cIubM/s1600/adminfeees.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsL4-e6gxlr3dxvNjjV5BHEPu8B1WjkvtfUz89j_KEs85SmxyFT7XJ83G8KnYIW6Ito1OGqaTbVfCJPXx6irUBUB9G28oRkAPGVa-LmafL5R74LJa4nvKSGeZKSA5w4sIzP4cFs9cIubM/s1600/adminfeees.jpg" /></a></div></span></span><div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;"><span style="color: white;">_</span><br /> <span style="color: white;"> <span class="pibfi_pinterest"> <img alt="03adminfees" class="alignnone size-full wp-image-716" height="196" src="http://blog.truecar.com/wp-content/uploads/2009/06/03adminfees.jpg" title="03adminfees" width="589" /> <span class="xc_pin" style="display: block; left: 509px;"> </span> </span></span></div></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">And as you might guess, "Friendly Al" at the dealer didn't mention this $599 fee, which appears in fine print on the Internet Ad, until he is asked point-blank about it. Salesmen can't lie, outright. But they can lie by <i>omission</i>. And if you don't <i>ask</i>, they won't tell you about the $599 fee or what is considered a "Dealer Installed Option". </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">Of course, if you do something stupid like <i>trade-in your old car</i>, they will just adjust the price of that accordingly, or pad the financing price. <i>The simpler you can keep any financial transaction, the easier it is to figure out the real price involved.</i></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">But what about dealer installed options? The local Nissan dealer adds their "Safety Package" for a whopping $1685. What is in this package?</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">Well they tint the windows. This sounds expensive until you realize that on this model, the rear windows are already tinted, and that a tint job in Florida is less than $100 - maybe $50 if done in bulk.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">They add a few options - the step rails shown above ($184) and wheel locks ($44) and rubber floor mats ($115). The car comes with standard floor mats, for free. They also add a pinstripe, which is maybe $50 and that's being generous.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">So this comes to about $500. How do they pad the price of the car by over $1000?</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">Well they add "One year free roadside assistance" - which is essentially worthless, particularly if you already have AAA. And they throw in "free oil changes for a year" which means two oil changes with Dino oil - a $39.95 value each, at Jiffy Lube.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">So where does the rest go? Well, no doubt they add in "labor" to "install" the side rails and other items and pad out the price accordingly.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">The point is, you don't know in advance, unless you ASK, what "options" are installed on the car, even if you have an "Internet Pricing Deal!" And not surprisingly, they get really vague on the phone about what these options are. If you can even get them to say, they usually just give you the flat fee for "the safety package" (how this makes the car safer is anyone's guess).</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">And you had better be astute, as they will try to tell you than some things that were installed at the factory were "Dealer Installed Options". Floor mats, bedliners, trailer hitch, and cargo extender, for example, are all factory options on this truck, but that doesn't stop the dealer from trying to add one or more to the list of "Dealer Installed Options". </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">So you take your stupid Internet Pricing Certificate (such as from TrueCar) to the dealer and they snicker at you, because most of that "discount" has been wiped out by "Dealer Installed Accessories". You think you are being clever and smart by clipping coupons, but once again, "the man" has beat you to the punch.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">And at that point, the vaunted ease of "No haggle Internet Pricing" is shot. Because you will spend hours - as many as four or five, trying to argue down these penny-ante items which collectively, add up to over $1000 to the sticker price of the car.</span></span><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> (The dealer will argue that since they have already been added to the car, they cannot be removed - except for an additional fee.)</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">And a lot of people do this - spending hours at a dealer, being worn down, until they finally throw in the towel and say "to heck with it, I just want to get out of here!" </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"><i>So you see what has happened here. </i> The dealers have found a neat end-run on the "no haggle" pricing. They quote you a price on the Internet, and when you get in the door, they show you another price quote, with "dealer installed options" added on. Dealer installed options that are often gimcracks and garbage and not worth much - but are wildly overpriced.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"><i><br />How do you avoid this?</i> Well, <b>buying used</b> is one way. You can't lose at their game, if you refuse to play the game. The same truck shown above, in a different color, with 10,000 miles on the odometer, is for sale an hour away for $21,400 from a private owner. In fact, two such trucks could be easily found on Autotrader. Yes, that is a savings of about $5000 when all is said and done. And the private owner has added the side rails <i>and</i> a tonneau cover ($500 value) as well.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">A used car seller isn't going to play this <i>bait-and-switch</i> game with you, telling one price on the phone, and then jacking the price when you arrive.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">It also illustrates how much a car depreciates in the first year of ownership. Here, a $26,000 truck drops $5000 in value - about 20% in just 10,000 miles. Those first 10,000 miles cost 50 cents a mile to drive!</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">The other advantage of buying used, is that when you sell the used vehicle, you lose a lot less in depreciation. Let's say two people buy these trucks, and one pays $26,000 at a dealer and the other pays $21,000 secondhand. Each keep their cars about 5 years and put 75,000 miles on them. At that point they are used cars, one with 75,000 miles on it, and the other with 85,000 miles on it - the difference in resale is negligable. They are both worth about $12,000 at that point.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">The new car buyer takes a hit of $14,000 in depreciation or 18 cents a mile. The used car buyer pays only about $9000 or about 12 cents a mile - a 50% decrease in cost-per-mile. Of course both buyers do far better than the fellow who bought the truck new and sold it in the first year - he got hammered with the most depreciation. That's why a late model used vehicle is the best bargain - it has taken the biggest hit in terms of depreciation.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"><br /></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"><br /></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"><b><u>FOOTNOTE:</u></b> Deceptions like this are perfectly legal, since the "disclaimer" mentions that other items may increase the price. Dealers also do very despicable things that are also legal. For example, they sell a car on credit to a buyer and slap temp tags on it. Two days later they inform the buyer than the interest rate on the loan is higher than expected. The buyer cannot "take the car back" as it is no longer new. Or, if used, the dealer will claim the "trade-in" was sold at auction already. This is perfectly legal, and one reason you should NEVER take possession of a car, until it is paid for.</span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"><br /></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../">The point is, car dealers have 1000 sleazy and yet legal tricks to fool you into spending far more money than you intended, on a new car. <i>The only way to win at this game is to not play.</i></span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span></span></div><div class="atcui-section atcui-clearfix atcui-small " id="" style="text-align: justify;"><span class="atcui-truncate disclaimer-trunc" data-birf-log="component" data-birf-ref="../"><span data-birf-log="component" data-birf-ref="../"> </span> </span> </div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-66311927410618940342013-10-15T06:32:00.000-07:002013-12-13T08:51:59.776-08:00ObamaCare is Here!<h1 style="text-align: center;"> <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNizyFuEZHsJ4ApAG-WR5OoQp3qvi3TDo4hqtJZVBvcgmbdv1AQy2G0TISX6cLQUeYgvAvTgdV0uzoRvI12aHWOx0KbQjU58YSlySBNbD1yFe6cKKdjx1pSSR10Mwul2dPa7-TvDJPORM/s1600/healthcare.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="287" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNizyFuEZHsJ4ApAG-WR5OoQp3qvi3TDo4hqtJZVBvcgmbdv1AQy2G0TISX6cLQUeYgvAvTgdV0uzoRvI12aHWOx0KbQjU58YSlySBNbD1yFe6cKKdjx1pSSR10Mwul2dPa7-TvDJPORM/s400/healthcare.jpg" width="400" /></a></div></h1><h1 style="text-align: center;"></h1><div style="text-align: center;"><i>Obamacare is here. Is this a good thing? Maybe on a personal level.</i></div><br /><br />NOTE: While I am no longer posting to my blog, I had to write up my experiences with the Affordable Health Care act, as it is quite interesting how this plays out. <br /> <br />I went on the affordable health care act website today to sign up for Obamacare - or at least see what the premiums are like. It is fascinating.<br /><br /><br />First, the site is pretty badly done. It asks the same questions again and again (middle name and Social Security number, e-mail address, and phone number, all entered twice - on separate pages) plus has a paranoid level of security with regard to user names and password structures, and security questions (two sets in different parts of the site).<br /><br />In addition, there are so many questions to be answered that have nothing to do with health insurance - like ethnicity and demographic data.<br /><br />And then it bombs out. The final "signature" page bombs, and then I get an e-mail message saying "I have a message waiting for me!" So I click on the link to sign in, and that signs me OUT on the bombed page. Badly done.<br /><br />The "message" says I am eligible for a $627 tax CREDIT every month (!!!!) based on my sucky 2012 income (2013 will be slightly better, so my credit may go down). The message is in a pdf format that is not recognized by my old version of Adobe Acrobat, but a new version of Adobe reader will display it.<br /><br />HERE IS A PROBLEM RIGHT HERE: While my tax credit is based on my 2012 income, if my income goes up next year, I may lose part of that tax credit, and thus have a nasty surprise on my tax bill on April 15th. As a self-employed person, it is hard to predict my income from year to year, which may vary from over $100,000 to as little as $25,000. This makes planning, based on the tax credit, nearly impossible. The only "safe" was to deal with this is to chose a plan that costs less than the tax credit, or be prepared to put aside money for April 15th.<br /><br />A warning message comes up that I have to "review my application for unresolved issues" but when I click on the link, it says "Page not found". Clearly the HTML isn't ready for prime time, but then again, it has been up for only 15 days now.<br /><br />Regardless of this warning message, the site allows me to proceed further in selecting a plan. <br /><br />What is troubling is that this massive tax credit, while appreciated, is something that government will have to pay for. At the present time, Mark and I are on a $10,000-deductible Blue Cross plan, which costs us $240 a month, combined. We get a deduction for this on our taxes, which might reduce the cost to $210 a month or so. <i>This is still a cost to us.</i><br /><br /><i>What is interesting is that I have a letter from Blue Cross on my desk, offering to extend my existing plan for another year, for a $298 premium</i>. This would "grandfather" in my high-deductible plan, but clearly compared to the tax credit plans, it is not a very good option.<i> </i><br /><i><br />With a $627 tax credit (each) we can "afford" a Cadilliac plan now - with more coverage - and pay <i>nothing for it.</i></i> This is great for us, personally, but it means that combined, the government will get about $15,000 less in taxes out of us in 2014 - which is about what we pay in taxes every year. In other words, our tax bill is being shifted from Uncle Sam to Blue Cross.<br /><br />All very well and fine, but what is Uncle Sam going to use to pay <i>his bills</i>?<br /><br />That is an interesting question.<br /><br />There are several levels of plans out there, Bronze, Silver, Gold, Platinum, and all in my State (Georgia) are from Blue Cross (my present insurer) or Humana:<br /><br /><blockquote class="tr_bq"><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> <b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Bronze DirectAccess w/HSA - caar </b></span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Monthly premium $0/mo. was $524.73</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $6,300 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,300</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> <b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Bronze DirectAccess w/HSA - cabp</b></span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Monthly premium $0/mo. was $547.62</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $4,000 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,350</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> <b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Bronze DirectAccess - cabr</b></span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Monthly premium $0/mo. was $541.23</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $4,300 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,350</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $35/20% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> <b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Bronze DirectAccess - caae</b></span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Monthly premium $0/mo. was $570.28</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $5,550 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,350</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $45/25% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 25% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $20 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> <b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Bronze DirectAccess w/Child Dental - cdae</b></span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Monthly premium $0/mo. was $619.41</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $5,550 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,350</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $45/25% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 25% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $20 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Dental: Child</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> <b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Bronze DirectAccess - caaw<br /> </b> Monthly premium $0/mo. was $575.81</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $5,750 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,350</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $40/20% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $20 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> <b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Silver DirectAccess w/HSA - cbbg</b></span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Monthly premium $22.56/mo. was $649.56</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $500group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $500</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Silver DirectAccess - cbds</b> Monthly premium $51.28/mo. was $678.28</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $200 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $600</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $10/10% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 10% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $10 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>BCBS Healthcare Plan of Georgia, Inc. Blue Cross and Blue Shield Healthcare Plan of Georgia Silver DirectAccess, a Multi-State Plan</b> Monthly premium $70.17/mo. was $697.17</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $200 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $650</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $5/20% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $10 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Silver DirectAccess - cbiq</b> Monthly premium $70.17/mo. was $697.17</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $200 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $650</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $5/20% Coinsurance after deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> 20% Coinsurance after deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $10 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Silver DirectAccess - cbaa</b> Monthly premium $77.96/mo. was $704.96</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $150 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $650</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $10 Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $10 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Gold DirectAccess - ccab</b> Monthly premium $206.52/mo. was $833.52</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $750 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,000</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $30 Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $15 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>BCBS Healthcare Plan of Georgia, Inc. Blue Cross and Blue Shield Healthcare Plan of Georgia Gold DirectAccess, a Multi-State Plan</b> Monthly premium $255.63/mo. was $882.63</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $750 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,000</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $30 Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $15 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Dental: Child</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>BCBS Healthcare Plan of Georgia, Inc. BCBSHP Gold DirectAccess w/Child Dental - cdcp</b> Monthly premium $255.63/mo. was $882.63</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $750 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,000</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $30 Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $15 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Dental: Child</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>Humana Employers Health Plan of Georgia, Inc. Humana National Preferred Bronze 6300/6300 Plan</b> Monthly premium $327.39/mo.</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $6,300 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $6,300</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> No Charge After Deductible Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>Humana Employers Health Plan of Georgia, Inc. Humana National Preferred Silver 4250/6250 Plan</b> Monthly premium $386.68/mo.</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $500 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $750</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $35 Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $60 Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $17 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>Humana Employers Health Plan of Georgia, Inc. Humana National Preferred Gold 2500/3500 Plan</b> Monthly premium $443.62/mo.</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $2,500 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $3,500</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $25 Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $35 Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $8 Generic drugs</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span></span><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"><b>Humana Employers Health Plan of Georgia, Inc. Humana National Preferred Platinum 1000/1500 Plan</b> Monthly premium $499.97/mo.</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Deductible $1,000 group total</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Out–of–pocket maximum $1,500</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> Copayments / Coinsurance</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $25 Primary doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $35 Specialist doctor</span></span><br /><span style="font-size: xx-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> $8 Generic drugs</span></span></blockquote><br /><br />Whew! That is a lot of data to digest! If I sign up for a "Bronze" or some "Silver" plans, it appears my health insurance costs will go from $240 a month to ZERO, and the coverage increased (deductible decreased to $6500 or less) and Uncle Sugar will pick up the tab.<br /><br />That's pretty sweet, considering my net worth is over a million bucks - I get some of that tasty gub-ment chee for a change!<br /><br />But what do these plans entail? It is hard to parse this out. When I click on "Provider directory" I get:<br /><br /><blockquote class="tr_bq"><h1>Access Denied</h1>You don't have permission to access "http://www.healthcare.gov/marketplace/auth/GA/en_US/www.bcbsga.com" on this server. Reference #18.f8050f17.1381842281.23969eec </blockquote> Which is not helpful. My present plan, even with a $10,000 deductible, does provide $40 co-pays at the doctor's office and a $15 prescription plan (the latter I never use, as many pharmacy plans are cheaper for generic and older drugs).<br /><br />The site also logs you out after 30 minutes, so you'd better read fast!<br /><br />We scotch the "gold" plans right off, as the premiums are ridiculous. People with severe health problems probably will go for these plans - if they have high drug costs and lots of treatments to make. But $500 a month? That's $6,000 a year and a big chunk of my disposable income. Not even a starter!<br /><br />Similarly, the link to "SUMMARY OF BENEFITS" goes to a dead link generating the following message:<br /><br /><span style="font-size: large;"><b>"Your Summary of Benefits and Coverage (SBC) is not available at this time, please check back soon."</b></span><br /><br />So..... I have to sign up for a plan without really knowing what the plan is all about.<br /><br />Geez, this isn't really very well thought out. The premium costs of each plan are far higher than my old $10,000-deductible plan was for TWO people. So we are talking about a4X increase in premiums! And I think the premiums went UP because Uncle Sugar is paying the tab - to the tune of $7000 a year.<br /><br />I was very hopeful that Obamacare would solve some of our health care crises problems. So far, it ain't looking very good to me.<br /><br />One problem is, of course, how the GOP is fucking this up totally. Suppose I sign up for this new plan, at $500 a month and then the GOP decides to kill Obamacare? I can't go back to my old plan, and now I may be stuck with a high-cost plan - and no tax deduction. Our overall premiums would be over $1000 a month, versus $240 before. I am not sure how this is "cutting" the cost of health care or health insurance. <br /><br />But stay tuned. Obviously this whole thing is in Beta stage....<br /><br />UPDATE: I am holding off on signing up for now. I have a $240 a month plan now (my share being about $120). If I sign up for a $570 a month plan, and the GOP decides to scotch the tax credit, I'd be screwed royally! <br /><br />UPDATE: 10/16/2013 I called Blue Cross. They have offered to extend my "non-conforming" plan for another year for $298. It is a $10,000 deductible plan.<br /><br />Blue cross has its own Beta website, Changemycoverage.com (they admitted it is not quite ready for prime time) where you can "sign up" for Obamacare - well, actually change from a non-conforming to a conforming plan. A conforming plan for two people would run $1037.31 a month (!!!) for two people.<br /><br />They also indicated that you might be able to shop for Blue Cross plans that are offered in other States (!!). <br /><br />Here is the conundrum:<br /><br />1. If I keep my non-conforming plan, I pay $298 a month, but get no tax credit (maybe a deduction, but no credit). I am still "insured" and do not have to pay the fine. <br /><br />2. It is unclear whether the non-conforming plan will be offered in 2014 - I may have to switch over to Obamacare eventually.<br /><br />3. Right now, we could switch to a conforming plan, and the tax credit WOULD PAY FOR ALL OF IT (Wheee! Free Ponies!!!) but the government would be out about $12,000 to $15,000 in tax money from us (basically all we pay in taxes).<br /><br />4. If our income goes UP, we may lose this credit, in whole or part, and then be "stuck" with a $1000-a-month plan.<br /><br />5. If Republicans manage to cut the tax credit, we may lose our subsidy and be "stuck" with a $1000-a-month plan - and wished we kept our old $298 plan!<br /><br />So, what should I do? Renew the existing plan as a back-up, AND sign up for "Obamacare" and see how that works out?<br /><br />Or just jump off the cliff, sign up for Obamacare, and hope the GOP doesn't kill off the tax subsidy, so our rates don't skyrocket.<br /><br />The best answer the folks at Blue Cross had was, "Wait and See" - which I suspect a lot of people are doing!<br /><br /><b><u>UPDATE: October 17, 2013</u></b><br /><br />If we assume that 1/3 of the country (100 million people) gets a subsidy averaging $5,000 a year, we are talking about 500 billion dollars in lost revenue to the Treasury. This is a lot of money! And that number could be much higher. Since the median household income is about $51,000 at the present time, it may be that <i>more than half</i> the country gets some sort of subsidy. <i>This could add a trillion dollars to our budget, easily.</i> Ouch. Now I see what the GOP is getting at.<br /><br />How much of a subsidy do you get? It is hard to play with the numbers as the healthcare.gov website does not have a "change my lifestyle" section just yet. When plugging in my 2012 income, it says I get a subsidy of $627 a month. But I may make as much as 50% more than that this year.<br /><br />This site: http://kff.org/interactive/subsidy-calculator/<br /><br />Has a subsidy calculator. Kaiser Permanente seems to have done the best job of preparing for this.<br /><br />So, for example, if I make $16,674 a year (my adjusted gross in 2012) my subsidy<br /><br /><blockquote class="tr_bq"> <dl class="clearfix"><dt><span style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: x-small;">Household income in 2014: 145% of poverty level</span></span></dt><dt><span style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: x-small;">Unsubsidized annual health insurance premium in 2014: <span class="bold-blue">$5,172</span></span></span> </dt><dt><span style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: x-small;">Maximum % of income you have to pay for the non-tobacco premium, if eligible for a subsidy: <span class="bold-blue">3.71%</span></span></span> </dt><dt><span style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: x-small;">Amount you pay for the premium: <span class="bold-blue">$619</span> per year</span></span></dt><dd><span style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: x-small;"> (which equals 3.71% of your household income and covers 12% of the overall premium) </span></span></dd><dt><span style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: x-small;">You could receive a government tax credit subsidy of up to: <span class="bold-blue">$4,552</span> (which covers 88% of the overall premium) </span></span></dt></dl></blockquote>This is on the Kaiser site, and it is interesting that it shows a lower subsidy that the government site - but still a substantial subsidy!<br /><br />Now, 2012 was a nadir of income for me. 2013 will be much higher. In fact, I will probably have an adjusted income of about $30,000 (apiece), if I apply singly:<br /><br /><blockquote class="tr_bq"> <dl class="clearfix"><dt><span style="font-family: Arial,Helvetica,sans-serif;">Household income in 2014: 261% of poverty level</span></dt><dt><span style="font-family: Arial,Helvetica,sans-serif;">Unsubsidized annual health insurance premium in 2014:<span class="bold-blue"> $5,172</span></span> </dt><dt><span style="font-family: Arial,Helvetica,sans-serif;">Maximum % of income you have to pay for the non-tobacco premium, if eligible for a subsidy: <span class="bold-blue">8.37%</span></span> </dt><dt><span style="font-family: Arial,Helvetica,sans-serif;">Amount you pay for the premium: <span class="bold-blue">$2,512</span> per year</span></dt><dd><span style="font-family: Arial,Helvetica,sans-serif;"> (which equals 8.37% of your household income and covers 49% of the overall premium) </span></dd><dt><span style="font-family: Arial,Helvetica,sans-serif;">You could receive a government tax credit subsidy of up to: <span class="bold-blue">$2,660</span></span></dt><dd><span style="font-family: Arial,Helvetica,sans-serif;"> (which covers 51% of the overall premium) </span></dd></dl></blockquote><br />Ouch. Even with a modest middle-class income (median income in this county is about $51,000, and combined, we would make about $60,000 in 2013) my subsidy would then drop in half. My premium would then be about $200 a month (as compared to $298 a month for both of us, in a renewed existing plan) even with the subsidy. As my income rises, the subsidy evaporates, and the cost of insurance would jump to $500 - APIECE....<br /><br />Note that the subsidy is based on INDIVIDUAL income, not on joint income. If we assume a "household income" of $60,000 and TWO people in the plan, we get the following numbers:<br /><br /><blockquote class="tr_bq"> <dl class="clearfix"><dt><span style="font-family: Arial,Helvetica,sans-serif;">Household income in 2014: 387% of poverty level</span></dt><dt><span style="font-family: Arial,Helvetica,sans-serif;">Unsubsidized annual health insurance premium in 2014: <span class="bold-blue">$9,317</span></span> </dt><dt><span style="font-family: Arial,Helvetica,sans-serif;">Maximum % of income you have to pay for the non-tobacco premium, if eligible for a subsidy:</span></dt><dd><span style="font-family: Arial,Helvetica,sans-serif;"><span class="bold-blue">9.5%</span></span> </dd><dt><span style="font-family: Arial,Helvetica,sans-serif;">Amount you pay for the premium: <span class="bold-blue">$5,700</span> per year</span></dt><dd><span style="font-family: Arial,Helvetica,sans-serif;"> (which equals 9.5% of your household income and covers 61% of the overall premium) </span></dd><dt><span style="font-family: Arial,Helvetica,sans-serif;">You could receive a government tax credit subsidy of up to: <span class="bold-blue">$3,617</span></span></dt><dd><span style="font-family: Arial,Helvetica,sans-serif;"> (which covers 39% of the overall premium) </span></dd></dl></blockquote><br /><br />This is interesting. The new premium under Obamacare comes to $475 a month (this is line with the Humana and BCBS Bronze plans, which run from $499 to $550 a month for the cheapest plans). This would be my out-of-pocket cost, with the subsidy (tax credit) included.<br /><br />Compare this to BCBS's renewal offer of my existing plan at $298 a month, and it is clear which is cheaper. The Obamacare plan might have a lower deductible ($6300) but does not have the co-pays and drug plan I have now. Hmmmmm....<br /><br />THUS MY CONCLUSION FOR THE TIME BEING IS THIS: Since I will only receive a partial subsidy for these new premiums, and the Obamacare premiums in terms of cash-out-of-pocket will be higher than my existing plan, I will renew my BCBS plan for the time being.<br /><br />This, tied with the uncertainty regarding the subsidy (and my income) makes the existing plan more attractive. If I dump my $10,000 deductible plan and go with Obamacare, and lose my subsidy through legislation or increased income, the cost of insurance would be about three to four times what I am paying now.<br /><br />Subsidy or not, for many Americans, a high-deductible existing plan may have lower monthly costs than even the cheapest Bronze Obamacare plan.<br /><br />This is not working out the way I thought it would!<br /><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-11795568588719835282013-06-26T06:52:00.000-07:002013-12-13T11:20:54.066-08:00Are You Ready To Build the Bar Stools<div dir="ltr" style="text-align: left;" trbidi="on">Being an essential for the style and design or fashionable restaurant to household use, the <b>bar stools</b> were created for uniform and appealing seating arrangement. The<b> bar stools</b> should be comfortable and durable giving a serious seating for dinner or nightcap. These days the <a href="http://www.dunelm-mill.com/shop/furniture/seating/bar-stools/" target=""><b>bar stools</b></a> can be seen at the heart of home; kitchen offering a perfect height for high counters in modern homes.<br /><br />An old thought about its structure is unattractive, wooden and ugly cushion but now it is much more than that. The interior designers are using almost every material as bamboo, iron, metal, wood, wicker for making the base and legs with lush cushions, armrests, back and even movement option. The project of building a<b> bar stool</b> involves following steps:<br /><ol style="text-align: left;"><li>All you need a bit of wood with simple construction tools available at your home.</li><li>You can make the frame of two or more with the wood and chose the design according to your own choice.</li><li>You will need the supplies as wood glue, clamps, screws, pencil, electric Saw, tape measure, sandpaper, stain or clear finish.</li><li>The legs are built with proper length and size and then attached to the seat frame with wooden glue and screws.</li><li>These are then sanded with sandpaper to smooth the surface.</li><li>Try out some decoration with the <b>bar stool</b> legs with stain or clear finish to give a lustrous look to the wood. </li><li>A comfortable cushion with shimmery cover is matched with the kitchen theme to offer a high seating purpose along the counter. </li></ol>You can also <b>purchase</b> bar stools from. <a href="http://www.dunelm-mill.com/shop/furniture/seating/bar-stools/" target="_blank">Dunelm-Mill </a><br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdCjFfHL5Kr4XDiUb7mZGEqsKdlogRnglZitYv1YEVsDF07fLyEWe9GISQrbTmMpYhpJxGWhTIi94OFaGb_lX7v-6GKehlnIAUo1AcWhOMaTvBWPeyeMQPJ5G-47d1kv91MI42DOBqwxaa/s1600/bar-stools1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdCjFfHL5Kr4XDiUb7mZGEqsKdlogRnglZitYv1YEVsDF07fLyEWe9GISQrbTmMpYhpJxGWhTIi94OFaGb_lX7v-6GKehlnIAUo1AcWhOMaTvBWPeyeMQPJ5G-47d1kv91MI42DOBqwxaa/s1600/bar-stools1.jpg" /></a></div><br /><a name='more'></a><br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXNMi4YxIGZBsjeaY7hSxbgV-Q94KIE8D6FNVrDKnha_g4MiNkBhSokAjr2qK-TsFFMoeDV6AGuZOGY8_XEKCa4l1LOql_0zaWbbGoyW1lriSB_QlJ1n69dd03LpXq28cLf17JPHfh-UVE/s1600/bar-stools2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXNMi4YxIGZBsjeaY7hSxbgV-Q94KIE8D6FNVrDKnha_g4MiNkBhSokAjr2qK-TsFFMoeDV6AGuZOGY8_XEKCa4l1LOql_0zaWbbGoyW1lriSB_QlJ1n69dd03LpXq28cLf17JPHfh-UVE/s1600/bar-stools2.jpg" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0YCHWpZWeUh4k3oowtW4-FSehmS3_cDERe3-5Dl4BoS86aEGTpnSZbbeckw1VWRfCtEAOWTIcGzuuJl8laVj1VcJ4xriLMkd_qxSinpcxIzSOOVqXSSQBlEmqZfjPUP1SNR6Odf6qQd_d/s1600/bar-stools.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0YCHWpZWeUh4k3oowtW4-FSehmS3_cDERe3-5Dl4BoS86aEGTpnSZbbeckw1VWRfCtEAOWTIcGzuuJl8laVj1VcJ4xriLMkd_qxSinpcxIzSOOVqXSSQBlEmqZfjPUP1SNR6Odf6qQd_d/s1600/bar-stools.jpg" /></a></div><br /></div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-91878037904536363202013-06-08T05:59:00.000-07:002013-12-13T11:20:54.098-08:00Living Room Design with Butter Yellow-Colored with Gold Tones<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;">The most crucial element for decorating a lounge is to make certain the colors you select for the wall paint would be the correct ones. Select mild pastel <a href="http://freshnist.com/" target="_blank">Living Room Design</a> colors like awesome blue, mild yellow, mild lavender or daring darkish colors like turquoise, sea Eco-friendly and rust. Utilizing heat colors like butter yellow-colored with gold tones will intensify the looks of the space, you can paint one of the partitions in a darker shade to ensure that the space appears larger.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">In situation you want to preserve the neutral temper of <a href="http://freshnist.com/decorating/living-room-designs/living-room-design-ideas-15-modern-and-comfortable-designs/" target="_blank">Living Room Design</a>, you can paint the partitions in shades of white and grey. Make certain the Living Room Design and colors of the furnishings and upholstery are in sync with one another to provide a space a pleasing look. Therefore it is recommended to select the lounge colors appropriately.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The following essential requirements for decorating the lounge would be the furnishings and its set up. Arranging lounge <a href="http://freshnist.com/furniture/22-ideas-about-pallet-furniture-useful-out-of-waste/" target="_blank">furnishings</a> ought to be carried out in this kind of a means that there's sufficient space for motion and the space ought to appear roomy. Do not just dump the couch and the remainder of the furnishings about which will provide the space a cluttered appear. For a little lounge, select <a href="http://palletfurniturediy.com/" target="_blank">furniture</a> that are little and has summary or spherical designs. </div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifjjxwv3J79jdMy_zcU_qdQM8IuGlMspfvtBXWNDESoNgsCdPuUmJbOrIjlDOW9nmJZEwvPiMgvgsM46irPAPh0qOqADdY5eG-pTS5qpDWbp4R65c-9W2KNPDMfk4oyHOVNgov-_8L8Ivf/s1600/living-room-design+(1).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifjjxwv3J79jdMy_zcU_qdQM8IuGlMspfvtBXWNDESoNgsCdPuUmJbOrIjlDOW9nmJZEwvPiMgvgsM46irPAPh0qOqADdY5eG-pTS5qpDWbp4R65c-9W2KNPDMfk4oyHOVNgov-_8L8Ivf/s1600/living-room-design+(1).jpg" /></a></div><a name='more'></a><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFDNnxcP4c2s8W1F_XFgD47pKJscq-iPwu_FY_bcVwiaNK6G4tCgCq52s7v_iORqvdLc9-YW0xVA7bgRZk-1uE6HRDCYR10Dv87_uy2_b_7qfAAmbvZ8iU9YyrOa61LhOA3tgRBjRXrQqN/s1600/living-room-design+(2).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFDNnxcP4c2s8W1F_XFgD47pKJscq-iPwu_FY_bcVwiaNK6G4tCgCq52s7v_iORqvdLc9-YW0xVA7bgRZk-1uE6HRDCYR10Dv87_uy2_b_7qfAAmbvZ8iU9YyrOa61LhOA3tgRBjRXrQqN/s1600/living-room-design+(2).jpg" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqeg_VlYHikMF2M9bmBdKrPB02xMl-nQ6u9Giu28Cr9yAIU9KlYfYOGb0BmOF3nh8xzvQ7-xAbCWJbp5Eux7HPQvYboNUrYXoka4QSbdnxkvi0DC6R5I8o0HJWNZtjEcXlnwyk4stg2hQD/s1600/living-room-design+(3).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqeg_VlYHikMF2M9bmBdKrPB02xMl-nQ6u9Giu28Cr9yAIU9KlYfYOGb0BmOF3nh8xzvQ7-xAbCWJbp5Eux7HPQvYboNUrYXoka4QSbdnxkvi0DC6R5I8o0HJWNZtjEcXlnwyk4stg2hQD/s1600/living-room-design+(3).jpg" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWR91whF0dVr7V62OJEVYJS5wp-ZZLTeShl1eMBqBxP2PgVagzmy0a96ilqEEgNQuUYzyLNxNx6Df9b1GUpPTzI1KMBRp7m0OJy3yqG9Jv-ZEuHuODKojDrAOHZrQziTCOTpR-AWnUR3WK/s1600/living-room-design+(4).jpg" imageanchor="1" style="margin-left: 1em; 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margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDYv2vgKQeXYzxyGhtiIye21IYyKO8I5Fs6gT7Klg3KYz9gjgga_nMcWqoYOR5B55YLnuud5agBwYaWXJzpwb-p7z_-brk3FmGw9n3xSAzBuFpPT2AYSqkIQqQnAYoX9eOo47ktaQwE4aE/s1600/living-room-design+(6).jpg" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaVEjrrzU-A5EtYkIBnDme1Dl5LFyVWIqKTQPdDbWw5yq8jOPpB4dGneRnP-CzXX5S4O_ovM8soasGyNkwIlp8yx1jIRJEX4uWdI1wgJnanuaAatVn52QccjBEu64QYn1cqODUtlTrzDta/s1600/living-room-design+(7).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaVEjrrzU-A5EtYkIBnDme1Dl5LFyVWIqKTQPdDbWw5yq8jOPpB4dGneRnP-CzXX5S4O_ovM8soasGyNkwIlp8yx1jIRJEX4uWdI1wgJnanuaAatVn52QccjBEu64QYn1cqODUtlTrzDta/s1600/living-room-design+(7).jpg" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjelETfIv6GV3BJq9ESFtR3cIux37OQ9QLs3EAlmjqLRk68hZmPyiqPdf-DnlBerN6inRJwuDQcHbI2EcsrTXJrh9PXqLApo1V34q86C1Qbnv_8txicrXnuhA1wcyrOIVU7XUM-K_QYCQmI/s1600/living-room-design.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjelETfIv6GV3BJq9ESFtR3cIux37OQ9QLs3EAlmjqLRk68hZmPyiqPdf-DnlBerN6inRJwuDQcHbI2EcsrTXJrh9PXqLApo1V34q86C1Qbnv_8txicrXnuhA1wcyrOIVU7XUM-K_QYCQmI/s1600/living-room-design.jpg" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2mTObN_16o3hNljWn-0gDzwC9zTxgw6MTX8TDBzJv_5aRjrXNVgtDMHT4yw39BblTcjGXtDMa2evwLuSqHc0qzYbxiVWrYykgUjEqDPXdRpdE1W-wiQUcVSjBYC8UxPtWA5Qek0MbL3zr/s1600/living-room-design+(8).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2mTObN_16o3hNljWn-0gDzwC9zTxgw6MTX8TDBzJv_5aRjrXNVgtDMHT4yw39BblTcjGXtDMa2evwLuSqHc0qzYbxiVWrYykgUjEqDPXdRpdE1W-wiQUcVSjBYC8UxPtWA5Qek0MbL3zr/s1600/living-room-design+(8).jpg" /></a></div><br /></div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-6107485555986244962013-06-08T05:40:00.000-07:002013-12-13T11:20:54.113-08:00Country Home Design Ideas<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;">A Country Home Design Ideas tend to make it cozier. It provides a country; easy and standard really feel to your <a href="http://homewithdesign.com/house/idea-to-change-your-dream-house-design/" target="_blank">beautiful house</a>. As your visitors enter your home, they'll see that it is very welcoming, pleasant, surreal and unpretentious. You may have it nation from your gate to the kitchen area and yard. The kitchen area would need you a lot time and work to style it simply because it will be the coronary heart of each house. You can include one or two French doorway fridges.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Your counter tops may be positioned with porcelain tiles, stone or marble. You could even select some hand-painted tiles and Country <a href="http://homewithdesign.com/" target="_blank">Home Design</a> Ideas. The eating space may be one of probably the most frequented components of the home that individuals collect. It is exactly where you get to have your family members an evening meal. You get to appreciate a great food with additional lengthy talks and laughter. You may even entertain your visitor’s right here.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Attempt to opt for a sizable rectangular desk in accordance to very best Country <a href="http://freshnist.com/" target="_blank">Home Design Ideas</a>. This desk may be produced of the sturdiest wooden in the marketplace. It might be produced of mahogany, pines radiate, maple and oak. Your chairs and benches may be produced of exactly the same materials as that of your desk. In purchase for your eating region not to appear blunt, you can place a corner cabinet or much better however, a dish rack or sideboard. This may not just be for aesthetic objective but for storage functions also.</div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuDdvR6Vw9tG-7KxFFwuShzUwY5CCaQjMzyl4MKgxp03rZ0h854zCg0ZNfFzwMKRVLXuhaFghFi29JWbNGWFeOOgXxyU5yTmge0O7Xrdidt-0tCTC1ldp8BmhFxr_bQ-TAO_qMyrg5YZyl/s1600/country-home-design-ideas+(1).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuDdvR6Vw9tG-7KxFFwuShzUwY5CCaQjMzyl4MKgxp03rZ0h854zCg0ZNfFzwMKRVLXuhaFghFi29JWbNGWFeOOgXxyU5yTmge0O7Xrdidt-0tCTC1ldp8BmhFxr_bQ-TAO_qMyrg5YZyl/s1600/country-home-design-ideas+(1).jpg" /></a></div><a name='more'></a><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJat4I26OTCa-BL3XAvdEFq_zL3PqoPB5_-1LhEHO9HHecLnYG1cxlnky9dKeVE05ysAJt9IIfcJE-HdXIPiiWnMINKmPG8fzeQA4vtdsBBvQc2y6EMCN-TEWG2W-zSF35c4sEzxi2p7P3/s1600/country-home-design-ideas.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJat4I26OTCa-BL3XAvdEFq_zL3PqoPB5_-1LhEHO9HHecLnYG1cxlnky9dKeVE05ysAJt9IIfcJE-HdXIPiiWnMINKmPG8fzeQA4vtdsBBvQc2y6EMCN-TEWG2W-zSF35c4sEzxi2p7P3/s1600/country-home-design-ideas.jpg" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh88HsuOGQYGPgHmJg-tc1cvnZsPCzlnlV9wnrY9GCXGacL79OPsPsxsN2Cp-trKlxZb5frq01tuxNPZpsSjWoKB16gW2hUJq3i4pZkSEcHEse-vx_EenLW2RWfJUw34qpduBZNIGJqmsSv/s1600/country-home-designs+(1).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh88HsuOGQYGPgHmJg-tc1cvnZsPCzlnlV9wnrY9GCXGacL79OPsPsxsN2Cp-trKlxZb5frq01tuxNPZpsSjWoKB16gW2hUJq3i4pZkSEcHEse-vx_EenLW2RWfJUw34qpduBZNIGJqmsSv/s1600/country-home-designs+(1).jpg" /></a></div><div style="text-align: center;">Country Home Interior Designs.</div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgo61W655qMhhgXiaZ_HBpN44I2MD_-r3Ggee8VNZHerNzXKUjxfQUmZfaRS7bLHzkpULr9Vquo6DLvxo7O7uVjsL939_d0ilUCuG-dDgn9Wjt_V3dLPpFj2bx3VMPzLno7dfn4a-XssiC/s1600/country-home-designs+(2).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgo61W655qMhhgXiaZ_HBpN44I2MD_-r3Ggee8VNZHerNzXKUjxfQUmZfaRS7bLHzkpULr9Vquo6DLvxo7O7uVjsL939_d0ilUCuG-dDgn9Wjt_V3dLPpFj2bx3VMPzLno7dfn4a-XssiC/s1600/country-home-designs+(2).jpg" /></a></div><div style="text-align: center;"><b>Country Home Designs.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaPsIabNVu7xFGXC3z0RM18Eajii0DNYPDSYDHyxynGYwH4y0T3reqD6rPAcOpTeQIt6RaYCoHl0D52UGIeuz47Nlti7Y829usiEEDfNKX6P-ZHFFMZcNuXcBGU7sv96TUI_fys5XCabDB/s1600/country-home-designs.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaPsIabNVu7xFGXC3z0RM18Eajii0DNYPDSYDHyxynGYwH4y0T3reqD6rPAcOpTeQIt6RaYCoHl0D52UGIeuz47Nlti7Y829usiEEDfNKX6P-ZHFFMZcNuXcBGU7sv96TUI_fys5XCabDB/s1600/country-home-designs.jpg" /></a></div></div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-51892251542699541882013-06-06T06:21:00.000-07:002013-12-13T11:20:54.131-08:00Pallet Kitchen Furniture Makes Your Dreams Come True<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;">The <a href="http://101pallets.com/" target="_blank">pallets</a> are unique wooden boards which can be cut and shaped into any structure according to your own wish. If you are thinking about remodeling your kitchen according to your dreams with a little investment, <a href="http://palletfurnitureideas.blogspot.com/2013/05/pallet-kitchen-furniture-diy-projects.html" target="_blank">pallet kitchen</a> is the right choice for you. Being cheap and easily available the pallets can decorate your kitchen shelves, wall hangings and cabinets. You can paint the pallet kitchen shelves, windows, dining tables, chairs and cabinets into any dark color to meet the modern furniture trends. Laminated floors in kitchens are high in fashion and you can get them through making effective use of pallets. Some people are conscious of suing pallets in their kitchen as they may prove hazardous to your health if not disinfected to prevent the bacterial and insect growth. By treating the pallets with bleaching solution and covering them with fabric or leather, you can prevent this risk.</div><div style="text-align: justify;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiokiFq87dGQyBXgBrYA97y-Duh8qqJLrfNmfVhXyF_mNL3DrblGe2bEVee1MjjSxoZrAxeolm1GFodMVp91B2NT8eBlHuiGLljoC-xsmd-sP29vZejpqLGDP4EeqtN1Vea3FWlBSvjl52h/s1600/pallet-kitchen-furniture-diy+(1).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiokiFq87dGQyBXgBrYA97y-Duh8qqJLrfNmfVhXyF_mNL3DrblGe2bEVee1MjjSxoZrAxeolm1GFodMVp91B2NT8eBlHuiGLljoC-xsmd-sP29vZejpqLGDP4EeqtN1Vea3FWlBSvjl52h/s1600/pallet-kitchen-furniture-diy+(1).jpg" /></a></div><div style="text-align: center;"><b>pallet kitchen shelves.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1Xhr-So8ax-CbzTLWoZENPdX2Dbf-HIYaM5vX_3tTr53_y9FANaJUU3NV09NZICsd08Ebsy4oVrSqiFwlKUNAnQDXePkSBvwcUChDgTSTxQoRyjYPd2etm7orHD-SlJVIdYUE6M9FqzTo/s1600/pallet-kitchen-furniture-diy+(2).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1Xhr-So8ax-CbzTLWoZENPdX2Dbf-HIYaM5vX_3tTr53_y9FANaJUU3NV09NZICsd08Ebsy4oVrSqiFwlKUNAnQDXePkSBvwcUChDgTSTxQoRyjYPd2etm7orHD-SlJVIdYUE6M9FqzTo/s1600/pallet-kitchen-furniture-diy+(2).jpg" /></a></div><div style="text-align: center;"><b>pallet kitchen furniture.</b><br /><a name='more'></a></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOYV0Vwsoo5j7nVAS3cGBy3DB5CxoWBVkMHGu26EU5Zlh6kX0NkgyS7geRm0vGutslk2FVdB_qrUDpMVMMZ9JRRTUaHHCtR1v4J1gGVlayNk_KAEmf7eYZKCmEii-w2yvxpJyUSxKo0iX5/s1600/pallet-kitchen-furniture-diy+(3).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOYV0Vwsoo5j7nVAS3cGBy3DB5CxoWBVkMHGu26EU5Zlh6kX0NkgyS7geRm0vGutslk2FVdB_qrUDpMVMMZ9JRRTUaHHCtR1v4J1gGVlayNk_KAEmf7eYZKCmEii-w2yvxpJyUSxKo0iX5/s1600/pallet-kitchen-furniture-diy+(3).jpg" /></a></div><div style="text-align: center;"><b><a href="http://woodenpalletfurniture.com/" target="_blank">Wooden Pallet Furniture</a>.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEit3zJqTZ-L3NfiTAi_7j5qcMgXiBp0PNK2UCU_6I09y-gGBGUMFcTOrxL0Re3RipHrjahA2lU3LM-7dQ2aeJEuvv5OntuKLGZqWolRLW6uN80OvAfjx81LLWqfR1qFV5mX7qnuz4mwXIzz/s1600/pallet-kitchen-furniture-diy+(4).png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEit3zJqTZ-L3NfiTAi_7j5qcMgXiBp0PNK2UCU_6I09y-gGBGUMFcTOrxL0Re3RipHrjahA2lU3LM-7dQ2aeJEuvv5OntuKLGZqWolRLW6uN80OvAfjx81LLWqfR1qFV5mX7qnuz4mwXIzz/s1600/pallet-kitchen-furniture-diy+(4).png" /></a></div><div style="text-align: center;"><a href="http://woodenpalletfurniture.com/pallet-furniture/20-amazing-diy-ideas-for-pallet-table/" target="_blank"><b>Pallet Table</b></a>.</div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiI_jk6NaF6BS_EyfVl0wFyTjJltHJDnNcxtzInQowKwSYKtaAHktUozNfBXjdWGuwUyqbAoQRMYYNQtX-QcLwHZ6slxmxrGqOA7YlrHWLooAJtl_KVI0XxNqCiCnzwY4708lOAEdKK-pKi/s1600/pallet-kitchen-furniture-diy+(5).JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiI_jk6NaF6BS_EyfVl0wFyTjJltHJDnNcxtzInQowKwSYKtaAHktUozNfBXjdWGuwUyqbAoQRMYYNQtX-QcLwHZ6slxmxrGqOA7YlrHWLooAJtl_KVI0XxNqCiCnzwY4708lOAEdKK-pKi/s1600/pallet-kitchen-furniture-diy+(5).JPG" /></a></div><div style="text-align: center;"><a href="http://palletfurniturediy.com/pallet-furniture/7-simple-yet-ravishing-outdoor-pallet-furniture/" target="_blank"><b>Pallet Furniture</b></a>.</div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7pLM5I9COr_1axXPQEtw9IEYOo2CSCSziriQGR-t21EUi_Vhs4aQfoqeBHoSBHP6Z-m_7OtO8rNhiMG02ijS9xiuR2fTWvO_6oTbVG_LiyIaSKR27W002DpWzTNu-3s66Igva0uEYPtGL/s1600/pallet-kitchen-furniture-diy+(6).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7pLM5I9COr_1axXPQEtw9IEYOo2CSCSziriQGR-t21EUi_Vhs4aQfoqeBHoSBHP6Z-m_7OtO8rNhiMG02ijS9xiuR2fTWvO_6oTbVG_LiyIaSKR27W002DpWzTNu-3s66Igva0uEYPtGL/s1600/pallet-kitchen-furniture-diy+(6).jpg" /></a></div><div style="text-align: center;"><b>pallet kitchen table diy ideas. How to.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRx7P-wvh-3dB7i9ZxDLgtFcOObGl4h5heVCtMD7W1CTYepKfdVbCOdpJ5h5uLd-Cvvao1yxadoOZ5dnpRCluCsvkJwWmFOP5p8SwQo5yRYC15xk6VGadCHlZfCSFnokWT8DlUvH2bPQzY/s1600/pallet-kitchen-furniture-diy+(7).JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRx7P-wvh-3dB7i9ZxDLgtFcOObGl4h5heVCtMD7W1CTYepKfdVbCOdpJ5h5uLd-Cvvao1yxadoOZ5dnpRCluCsvkJwWmFOP5p8SwQo5yRYC15xk6VGadCHlZfCSFnokWT8DlUvH2bPQzY/s1600/pallet-kitchen-furniture-diy+(7).JPG" /></a></div><div style="text-align: center;"><b>pallet kitchen table diy.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZubghZl8gpf3-JvLnYARj-bcjQMFOuUd5JNbd5EONMyvcENVEAwml__Jzn-6OKl9-qa9f4k7JeQHwgCZ0itvTbZZrTVoz8pKVnS69q_bMcs6itcO2UtRFM0Qke8muSeEuD_z2KpnaIM5N/s1600/pallet-kitchen-furniture-diy+(8).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZubghZl8gpf3-JvLnYARj-bcjQMFOuUd5JNbd5EONMyvcENVEAwml__Jzn-6OKl9-qa9f4k7JeQHwgCZ0itvTbZZrTVoz8pKVnS69q_bMcs6itcO2UtRFM0Qke8muSeEuD_z2KpnaIM5N/s1600/pallet-kitchen-furniture-diy+(8).jpg" /></a> </div><div class="separator" style="clear: both; text-align: center;"><b>Pallet Kitchen Island.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMdSs7K7vX0ewAMfPVv2fn47yWooL8o3CofBn8ZJ8kURIVn67Gh7RKe8siVojiNFvYRUVfyzJ4XUkH4IVRdRgi7cW51NCu7iu1Ur9KhNOFUrjgt_6hu03EhRydXaWgFfZFRf7Pa_aTIwMY/s1600/pallet-kitchen-furniture-diy+(9).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMdSs7K7vX0ewAMfPVv2fn47yWooL8o3CofBn8ZJ8kURIVn67Gh7RKe8siVojiNFvYRUVfyzJ4XUkH4IVRdRgi7cW51NCu7iu1Ur9KhNOFUrjgt_6hu03EhRydXaWgFfZFRf7Pa_aTIwMY/s1600/pallet-kitchen-furniture-diy+(9).jpg" /></a></div><div style="text-align: center;"><b><a href="http://palletfurniturediy.com/" target="_blank">Pallet Furniture DIY</a>.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitSs7djryAWjFZx6K7K6PFd_yFHtgqg0k2_hC_KLy1zPDtDImrjhULOovUp6wKjUlzEjhuPhYDpsT4KvK3sw_YZN2Tj_jfv-qYa2JqlyEYL2XDgyLaGL9rgnJyZgRN0UaOCphCXhp2_-V2/s1600/pallet-kitchen-furniture-diy+(10).jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitSs7djryAWjFZx6K7K6PFd_yFHtgqg0k2_hC_KLy1zPDtDImrjhULOovUp6wKjUlzEjhuPhYDpsT4KvK3sw_YZN2Tj_jfv-qYa2JqlyEYL2XDgyLaGL9rgnJyZgRN0UaOCphCXhp2_-V2/s1600/pallet-kitchen-furniture-diy+(10).jpeg" /></a></div><div style="text-align: center;"><b>Kitchen Cabinets Made From Pallets.</b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMmAtihNPtft9JD7fPn_WbLj2wcWXm6QM8i8AMSOC1QSUCfs7MVaraZJ_Rcnzq-ag5FPj9inrqa0E-1ZHQ3gOyMjFvFgKDrK6TkwgoTob9N6xfPs0J2AVB-9iMh9yiMlEBcEylpuK9K8sV/s1600/pallet-kitchen-furniture-diy+(11).jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMmAtihNPtft9JD7fPn_WbLj2wcWXm6QM8i8AMSOC1QSUCfs7MVaraZJ_Rcnzq-ag5FPj9inrqa0E-1ZHQ3gOyMjFvFgKDrK6TkwgoTob9N6xfPs0J2AVB-9iMh9yiMlEBcEylpuK9K8sV/s1600/pallet-kitchen-furniture-diy+(11).jpeg" /></a></div><div style="text-align: center;"><a href="http://freshnist.com/furniture/17-diy-plans-decorating-your-food-area-on-pallet-dining-table/" target="_blank"><b>Pallet Dining</b><b> Table</b></a><b> or Kitchen</b><b> table made from pallets. </b></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRBsKohRIpQl-DeYZHRtTnKoFy7E9D6QrNfGq1BpjbOXU85IURMttjQD1n2a6OAeoKLmZszYDn9XnboifQtvx7JMTe1H3hVwCpy03dxkgzzQ3-HRV9deJfOwu7gQ_7K8_q8aTvFQCj5W82/s1600/pallet-kitchen-furniture-diy.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRBsKohRIpQl-DeYZHRtTnKoFy7E9D6QrNfGq1BpjbOXU85IURMttjQD1n2a6OAeoKLmZszYDn9XnboifQtvx7JMTe1H3hVwCpy03dxkgzzQ3-HRV9deJfOwu7gQ_7K8_q8aTvFQCj5W82/s1600/pallet-kitchen-furniture-diy.jpg" /></a></div><div style="text-align: center;"><b><a href="http://101pallets.com/pallet-shelves/pallet-shelves-best-utilization-of-space/" target="_blank">Pallet Shelves</a> Made From <a href="http://palletfurniturediy.com/pallet-ideas/5-places-where-can-i-get-pallets/" target="_blank">Pallets</a>.</b></div></div>devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-58021434426532144482012-12-31T11:28:00.000-08:002013-12-13T08:51:59.869-08:00Last Post<div class="separator" style="clear: both; text-align: center;"> <iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/JvfG9uFswis?feature=player_embedded' frameborder='0'></iframe> </div> <div style="text-align: center;"><i>When you set out to do what you wanted to do, it is time to stop.</i></div><br />I have enjoyed writing this blog over the last four years. But like all good things, it has to come to an end. I have been writing this blog since November 2008 - almost 2000 posts at this point. It is time to call it a day. Why? A number of reasons.<br /><br /><blockquote class="tr_bq">1. I did what I set out to do, and I'm done.<br /><br />2. The bog has become a bit of a time-bandit for me.<br /><br />3. The postings are becoming repetitive and redundant.<br /><br />4. I am not sure my message is getting across - or could get across - due to human nature.</blockquote><br />This last reason is most troubling. The transformation I have gone through in the last five years has not been some sudden revelation on my part, but rather, I think, a transformative change that occurs in most people as they reach a certain stage and age in life. It does not occur in everybody, or at the same age, of course. Many folks never end up "getting it" and go to their graves as angry and destitute middle-class people. <br /><br />But I think when you reach a certain age, and face retirement and death in the face, you realize that life isn't what you thought it was at age 20, or even age 40. And for many people, this becomes a "mid-life crises" where they get a divorce and <i>spend even more money</i>. But for others, it is a time for taking stock and realizing that the party doesn't go on forever, and what's more, that in a very short time, the earning years will end - and that is a good thing. I don't want to work forever. Or if I do, I want it to be a <i>personal choice</i> not something forced upon me.<br /><br />If you try to tell a 20-something that spending all their income on pot, beer, cars, cell phones, and other bling is just a stupid waste of money and net worth, you are shouting to deaf ears. Kids want toys, and being "adults" for the first time in their lives, they want to drink deep from the well of life - even if it means <i>borrowing from their future self to do it</i>. They set themselves up for misery later in life and there ain't much that can be done about it.<br /><br />And when that misery kicks in, at age 30 to 40 - when it seems that they <i>never will get out of debt</i>, and no matter how hard they work, they never seem to get ahead - they will blame others rather than look inward at their own malfeasance. It is Wall Street's fault! It is the Big Corporations! Nothing you can say will convince them that their credit card debt was a result of their own <i>life choices</i> - chasing after frequent flyer miles instead of low interest rates. And their four years of Party U. that was paid for by student loans? Has to be someone else's fault - along with that onerous "funny money" mortgage they signed.<i> Right?</i><br /><br />It is simple human nature. It isn't about to change. A very few people might "get it" - but not many. I know I didn't, until about age 50. I thought, like most Americans, that chasing after "things" was the point in life, and that having nice stuff meant you were wealthy. <i>I was wrong</i>.<br /><br />A reader e-mailed me when I announced I was ending the blog and said, "Congratulations for not falling into the blog trap!" which I thought was an interesting comment. <i>A blog can be a trap</i> - a time bandit that sucks up all your energy and starts to lose focus. And after a while, it just peters out - as so many do that I have seen - and people forget about them or abandon them. Better to leave intentionally than to just give up. Better to <i>leave on a high note</i>, as Seinfeld would say.<br /><br />And who knows? Maybe I can organize and revise these better postings into a more coherent narrative and put them into e-Book on Amazon or something. It would be a better use of my time. I did not "monetize" this blog as the sorts of side-bar ads that would appear would be for the worst sort of odious deals that I rail against. And that is one thing I am proud of. This blog, for better or worse, is not just some <i>Search Engine Optimized</i> "content" designed to generate click-through revenue - like so much of the crap on the Internet today. And I may revisit some of these postings and "polish them up" a bit, correct typos and misspellings, dead links, and whatnot.<br /><br />Writing this blog has improved my writing skills and typing ability, both of which were no slouches to begin with. While I could do about 60-80 wpm before, I am hitting 100 wpm on occasion, and fully "touch-typing" today, not looking at the keyboard at all. It is helpful for my career, which involves a lot of writing.<br /><i><br /></i><i>But what about the journey, and what have I accomplished?</i> When I started this blog, I was in debt. I had been in debt a lot, having well over a million dollars in mortgage debt at one time. But that was for investment properties, most of which I sold before the market crash (my office building sold in 2008, after the crash, but I still realized a $400,00 capital gain from that, which is rally what precipitated the crises that started me down this road).<br /><br />I realized that I made a lot of money in life - millions in fact. Most people do, even at a $50,000 a year job, you will make over a million dollars by the time you retire. But where did it all go? Here I was, 48 years old, having made a ton of money and <i>still in debt</i>. I had a mortgage on my home, another on my vacation home, and thanks to a capital gains fiasco, I had a $40,000 credit card bill to pay off.<br /><br />At the same time, I owned two boats, five cars, a jeep, an RV, an antique tractor, and a host of other "things" all of which were very nice things, and were "paid for" but were in fact costing me money. The taxes alone on my two homes were costing me $10,000 a year. I was spending another $5000 a year on homeowner's insurance. I was paying $500 a month on life insurance policies. I was still making the final payments on my student loans! And I was paying for two internet connections, landlines, cell phones - all sorts of stuff.<br /><br />And foolishly, I did not rent out my vacation home to help cover some of these costs.<br /><br /><i>That is where the money all went</i>. It went to lots of little expenses, lots of little purchases, and a lot to interest payments on credit cards and mortgages.<br /><br />And then of course, the market crashed. My income dropped as the economy collapsed. While I had a good amount in savings, I saw much of this cut in half by the recession. And while I could "keep all the balls in the air" with a high income, as my income declined, it became readily apparent that I was burning through savings to pay expenses.<br /><br />Something had to be done - and should have been done a long time ago. I realized that while I could "afford" fancy cars and vacation homes and boats, having all of them at once was just too much. And it was too much work, as well. Mowing five acres of lawn took hours every week. And changing the oil on five cars? Winterizing two homes and two boats? Forgetaboutit! I realized that I was a slave to possessions - they owned me, I didn't own them.<br /><br />It is possible, in this country, to live the life of what in the past would have been a rich man, on a middle-class salary today. But maintaining all that sort of stuff is where it all breaks down. Really rich folks can afford to hire people to paint their mansions and maintain their fancy cars. When we have to pay someone to do these things, that is where we run out of money.<br /><br />I started by cutting expenses - to the bone. I cut my homeowner's insurance costs in half, merely by shopping around and going to higher deductibles and lower coverage. I cut my life insurance down to zero by converting policies to paid-up status (and they now <i>pay me</i> every year instead). I shopped our cell plan, our landline, our internet services. I looked at every area of spending - our food, our clothing, our utility bills. And I realized that there was no one area of "waste" in my life, but rather a lot of spending a little too much here and a little too much there, that added up to a lot of money over time. You stop watching the little things and they become large things in short order.<br /><br />Just saving $10 a day, for example, adds up to $3650 a year, which if invested, would be a couple hundred thousand in retirement. And for most folks, this "sacrifice" might mean little more than packing your own lunch or not buying a Starbucks. And yet many middle class people say they can't afford to save!<br /><br />And credit cards! I got rid of the high-interest-rate ones and rolled them over into low-rate cards and then paid them off. It was difficult, and it took years to bring the balance down. How I allowed myself to get into that debacle, still eludes me. What was I thinking, signing a loan document at 14.5%? <br /><br />I tried early on to save my lifestyle - which proved to be pointless. While I was able to cut costs, the expense of owning so much "stuff" was still considerable. Cars need repairs over time. Antique Tractors strip a camshaft gear. And while I always wanted to rebuild a flathead Ford, it is better to do such things at a time and place of your own choosing, rather than to be forced to do it as the lawn gets higher and higher.<br /><br />But pride goeth before the fall. And we see this all the time in the recent meltdown - people wanting to hang on to upside-down mini-mansions and luxury cars, rather than be perceived as "giving up" by their neighbors. We see this all the time here on Retirement Island - people getting reverse mortgages so they can "hang onto their homes" even if they really would rather downsize to something simpler and easier to maintain as they get older. The reason? They don't want to be embarrassed in front of people <i>they don't even know or care about</i> and be perceived as "poor".<br /><br />Myself, after owning eight homes over the years, realize that a house is just that - a house. And since none of the houses I owned were Frank Lloyd Wright homes, they were not worthwhile making into showplace estates. You can make the perfect lawn - as my neighbors have done - but who really cares that you have made a bland and inoffensive tract home look tidy? No one. And yet that will be the epitaph of many an older man - "He had a really nice lawn."<br /><br />We were growing tired of maintaining two homes, too. It was a lot of work. And frankly, while it is fun to go on vacation, it is not necessarily fun to go on vacation every year to the same place, and spend half your time on home maintenance. Houses, like cars, don't like to "sit" unoccupied, and vacation homes have special troubles of their own, just from sitting.<br /><br />So we bit the bullet and sold it - at a loss, of course, the first time in our lives we lost money on Real Estate. We sold the boats, we sold the cars, we sold the tractor, the Jeep. It wasn't sad to see it all go. It was <i>liberating</i>. And most people will never have the experience of going into the bank and depositing a check for a half-million dollars - to a befuddled bank-teller in training who had to call the manager.<br /><br />And paying off the mortgage and that remaining credit card debt? Priceless. It was like, well, ecstatic. Like 100 orgasms in a row, that first acid trip, or whatever. The idea that you had <i>no debt whatsoever</i> was as liberating as, well, liberation. I was, for the first time since I was 21, no longer a slave to debt.<br /><br />But it hasn't ended there. I realized that while knocking $30,000 a year out of my budget was good, there were still a lot of expenses in my life - homeowners insurance, car insurance, utilities, property taxes, and the like. It still costs $1000 a month just to live in a house "free and clear" here. And maybe, someday down the road, we will sell this place and move to something smaller and easier to care for - so we can <i>do things rather than own things</i>. When building our pottery studio, we realized that you can build a nice house for not a lot of money - and not need a lot of room to live in. A simple Park Model home, for example, might be all we need. Who knows?<br /><br />As 2012 winds down, the world is more uncertain than ever, but appears to be headed for recovery. What will happen is anyone's guess. But today, we are prepared for the worst far better than we were in the past. We have no mortgage to go upside-down on, and we don't have to worry about making X number of dollars a year to get by, as our personal life expenses are down to nil. If we make more than that, we can spend the money on <i>doing things rather than owning things</i> and we look forward to that a lot. For example, renting a 40' yacht in June of this year, in France for a week. It will cost less that the storage and insurance costs on our 28' boat for one year. And I don't have to change the oil or grease the outdrive, either!<br /><br />And the most wonderful thing of all is that <i>I could retire right now, if I had to</i>, as I have enough money to retire. How did I do that? Simply by lowering my lifestyle costs. If I can live on $50,000 a year, as opposed to $150,000 a year, the money I have in the bank can go a long, long way. More than three times as far, in fact.<br /><br />I suppose some of the old habits may creep back, over time. Perhaps. It is inevitable. As we make more money, we tend to spend more - Boyle's law at work. But I doubt I will be going back to a barbershop and spending $20 on a haircut - for the rest of my life - as we now have these hair clippers. And I doubt I will ever set foot in a Starbucks again - now that we are drinking tea (and coffee today just gives me horrific cramps). And while we may visit the Harris Teeter for their Indian Food Section, we still shop at Wal-Mart for their inexpensive crackers, cheese, and other staples.<br /><br />The battle is never over, and the marketplace is a battlefield. You have to fight the merchants and purveyors all the time. And moreover you have to fight <i>yourself</i> - your own urges to "have it all now" and want the latest shiny, shiny, instead of having less "junk", saving more, and having <i>real wealth</i>.<br /><br />So, dear reader, if you got something out of this blog, I am happy. But as I noted when I started it, I wrote this blog for my own purposes - to turn my own life around. Writing about something tends to reinforce ideas, and the more you pound these ideas into your own head the more you program your brain with <i>positive normative cues</i>.<br /><br />If I can leave you with one thought, that would be it. Stop watching television, the media, and the advertisements that all pound <i>poor normative cues</i> into your head. You don't need to be "up to date on the news!" other than the weather. And obsessing about politics is a bad idea. Concentrate on your own life and what you want out of it. Unplug from society's expectations. Stop worrying about what other people think of you, and worry more about <i>what you think of yourself</i>.<br /><br />Be happy. It isn't hard to do in this country, and sadly, so few do it.<br /><br /><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-3994256563027282832012-12-31T07:54:00.000-08:002013-12-13T08:51:59.963-08:00What a Rotten Year! Or...Maybe Not!<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi90qHzYrlxPQ3SLh4jDU_pVUuMkUqQE0Gqa2JRdk5KELH-QgwhkSf92KfonbV4S0BVSo-g2yhqL9A5vjT9Z7ZDoUsazVlucbK2cvFkfuWeozsanyDal7YFwDM66DOvPX6-LVbCi_oH7lw/s320/crying+clown.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi90qHzYrlxPQ3SLh4jDU_pVUuMkUqQE0Gqa2JRdk5KELH-QgwhkSf92KfonbV4S0BVSo-g2yhqL9A5vjT9Z7ZDoUsazVlucbK2cvFkfuWeozsanyDal7YFwDM66DOvPX6-LVbCi_oH7lw/s320/crying+clown.jpg" /></a></div><div style="text-align: center;"><i>Oh what a horrible year we've had! Everything is going so badly. </i></div><div style="text-align: center;"><i>No, wait, that's not quite right, is it?</i></div><br />On the Internet, you see people trolling and grooming and posting messages about how awful things are. This is nothing new, we've seen it in real life since time began. During every economic recovery I have lived through, there were legions of people willing to tell you how awful things were and why everything was so rotten. These are called <i>depressed people</i> and you shouldn't listen to them.<br /><br />During the 1950's, we had a huge post-war recovery and our nation was prosperous. But to listen to some folks, it was an awful time, what with nuclear annihilation, the cold war, and youth gangs and all. The fabulous fifties, according to some, were a dark and dreary time!<br /><br />And during the 1960's, the economy boomed again. But if you listen to some folks, their only impression of the 1960's was race riots, assassinations, and the Chicago 7. Yea, bad things happen - <i>they always do, you know</i>. But a lot of great things happen as well. People seem to forget the latter.<br /><br />The 1970's? Well, <i>they did kind of suck</i>. Nixon resigned in disgrace, we made a hasty exit from Vietnam, stag-flation and oil embargos paralyzed the country, and Jimmy Carter was President. But you know what? We still drove off to work every day - in our crappy 70's cars - and people still had a lot of fun. I know I did. I spend most of my time water-skiing and smoking pot. There are worse ways to sit out a decade.<br /><br />In the 1980's, the economy slowly recovered - but the naysayers would have you think that "Reaganomics" killed off all economic activity of that decade. The opposite was really the truth. Gas prices eased and salaries shot up. Things were looking up and people were doing well.<br /><br />The 1990's, of course, were the Clinton years. And you may think he was a failed President for getting a blowjob in the oval office, the economy prospered and frankly, I made a ton of money during that decade.<br /><br />the 2000's were marked by our war on Terror - but it is a war we have largely won. While we may never wipe out all these terrorist groups (any jackass with a stick of dynamite and two friends can start another one), I think we proved that the "threat" of Al Quaeda can be kept tamped down. And the economy roared again - and then tanked (as it did in 1959, 1973, 1980, 1992 and in 2001 - perhaps ends-of-decades are a good time to dump stocks!). But by 2010, it was starting to recover.<br /><br />And today? Well, the recession has been officially "over" for over two years now. The definition of "recession" is when an economy shrinks, not expands. And we are expanding - nice and slowly, thank you, which personally is the way I think it should be. The slower the expansion, the longer the recovery will last. Rapid expansion is usually followed by rapid and more severe decline.<br /><br />Unemployment is down, housing starts are up, existing home sales are up, home prices are up, foreclosures are starting to ebb, unemployment is down. And it will get better, too, once we stop extending "unenjoyment" indefinitely and people realize that they aren't getting that overpaid job back, ever again - and take a job they are <i>actually entitled to</i>.<br /><br />And the stock market? <i>Way up over this time last year</i>. In fact, I made more on my investments this year than I did in ordinary income from work. My investment portfolio went up 13% since December of last year, which is not a bad annual rate of return. Will this continue at this rate? Well, we have already seen a drop of a couple of percentage points due to Boehner's boners. But like July 2011, we will bounce back from this, eventually.<br /><br />My life insurance went up a nice 5.7% which today is considered a good rate of return. And while my income reached a nadir in the summer of 2012 (partly because I took a two-month vacation), my income is ticking up for 2013, and looks to be pretty good for the new year.<br /><br />And my debt load is pitiful. I am carrying a small balance on my business credit card ($2000) for some filing fees owed to me by a client, but that is about it. No mortgage, no car loan, no staggering monthly payments to make. Even if the shit hits the fan, I'm set - or at least better off that I was four years ago.<br /><br />In other words, not only are things <i>not all that bad</i>, they are pretty freaking good, compared to say, 2008.<br /><br /><i>But no one wants to admit to that.</i> Why is this? The political types want to say everything is rotten, so they can blame political opponents. This is how you gain power and leverage in a political debate. And both parties do it, although the GOP, being the party out of power, does it more lately.<br /><br />And people like to feel sorry for themselves - wallow in self-pity. <i>It feels good to feel bad</i>, sometimes, and we all like to indulge ourselves, from time to time. But some folks take this too far, and it blows up into a full-blown mental depression, and nothing you can say will make them think otherwise.<br /><br />In fact, <i>good news is bad news</i> to such idiots. You tell them that the stock market is up, and they say, "Well, wait for the <i>double-dip recession</i>! I read about it on a website!" Or you say that housing sales are up, and they argue, "Well, that is only because the banks are holding back on foreclosures!" For every piece of good news, they have some long-winded and improbable theory as to why it is actually bad news.<br /><br />And the way economies work - the way human nature works - things will get better and then get worse. <i>This isn't the last recession you will see in your lifetime or the life of mankind</i>. So the naysayers can <i>always</i> say, "I told you so!" even if they have to wait a decade or more for their negative dreams to come true.<br /><br />But more to the point, life <i>is what it is,</i> regardless of your credit score or the level of the Dow, or who is in the White House. A beautiful day in the park doesn't have a score or level or credit, and never goes into recession or recovery. You have to look at life <a href="http://livingstingy.blogspot.com/2011/02/treat-life-as-if-you-were-customer.html"><i>like a customer</i> </a>sometimes, and appreciate it when it is beautiful and not worry so much about nonsense like jet ski payments and new apps for your cell phone.<br /><br />2013 will be a good year - regardless of the debt ceiling, the fiscal cliff, the stock market, or unemployment rates. Whether you enjoy life or not has a lot less to do with money than you think.<br /><br />But even if you measure your life in terms of dollars and cents, 2013 seems poised to be a pretty good year, no matter how you slice it.<br /><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-44892579825237161942012-12-30T06:07:00.000-08:002013-12-13T08:52:00.054-08:00Some Fiscal Cliff Myths<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHhgx3dRd_MozYv-X58eHT0ey8Xa9ke5bBNez8P7bO_yPgGKZ73PuZ5c6vIEMpzJXhMImdMD3-7FvlQw-Lss7BPEPWbiLgxR2iodV5swIg8K1dGgF8eS1G_SZaGz1o5JPoA2pTPeg5zxA/s1600/thelma.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHhgx3dRd_MozYv-X58eHT0ey8Xa9ke5bBNez8P7bO_yPgGKZ73PuZ5c6vIEMpzJXhMImdMD3-7FvlQw-Lss7BPEPWbiLgxR2iodV5swIg8K1dGgF8eS1G_SZaGz1o5JPoA2pTPeg5zxA/s1600/thelma.jpg" /></a></div><div style="text-align: center;"><i>The media is baiting us on Fiscal Cliff horror stories, to get us to watch television and to get us to click on stories. The political parties are also using this man-made crises to try to get us all riled up. Don't be. Things are not as bad as all that.</i></div><br />In a day or two, we will launch off the "Fiscal Cliff" which sounds scary, but is not as bad as people are making it out to be.<br /><br /><a href="http://livingstingy.blogspot.com/2012/11/should-you-worry-about-fiscal-cliff-no.html">As I noted in an earlier posting</a>, the only real effect of this "Fiscal Cliff" is to go back to the tax rates of the Clinton Administration (when the country was doing very well, thank you) and to cut government spending across-the-board, which is what we should be doing, anyway.<br /><br />Cutting, that is, except Social Security and some other entitlement programs, which ironically are what the politicians are arguing should be cut, so we can preserve defense spending. Frankly, for the average citizen, the cliff is a better option. Bear in mind that we spend more on defense than the next ten largest countries - and you get an idea that we can afford a few cuts without being "weak on defense".<br /><br /><a href="http://livingstingy.blogspot.com/2012/12/why-no-one-cares-about-fiscal-cliff.html">So a lot of people are just saying "ho hum" to the Fiscal Cliff</a> and this has the media apoplectic. After all, if we aren't going to pay attention to the media, the world will come to an end! Oh, wait, they told us that was December 21st. Right?<br /><br />So the media continues to crank up the Fear - to get you to watch. And a lot of "end times scenarios" are batted about in the media, and fortunately, most all of them are outright falsehoods. The media doesn't bother to <i>explain things well</i>, as you get more hits and more viewers with vague explanations and letting people live under misunderstandings.<br /><br />Besides, television isn't really a media well suited to long explanations of anything. As they say in litigation (or in politics), the first side to go technical, loses. And when you try to explain things clearly, people change the channel.<br /><br />So what are the myths the media is spreading, either directly or by error-of-omission? Here are a few:<br /><br /><br /><b>1. If nothing is done by December 31st, we go over the fiscal cliff and this can never be undone, ever, ever, EVER! </b> This is not said outright by the media, but it is implied in every story, and it is the greatest lie never told - as it is an error by omission.<br /><br />Every media story foretelling gloom and doom is predicated on "If we go off the fiscal cliff" such-and-such could happen - provided that Congress <i>does absolutely nothing for a whole year.</i><br /><br />But of course, this is just silliness. While Congress might not agree on a plan by tomorrow, they likely will come to grips with the issue in the coming weeks. It is highly unlikely that Congress will sit on its hands for all of 2013 and do absolutely nothing.<br /><br />So while the "cliff" provisions might kick in for a week or so, it is likely that Congress will act, and a new budget agreed upon, and many of the tax provisions and the like will be made retroactive to January 1st. <br /><br /><br /><b>2. If no agreement is reached by December 31st, we will automatically go into a recession. </b> Again, what the media actually reports (and words so carefully that you might miss it) is that <i>some economists</i> predict that we could have a recession <i>if Congress refuses to act for an entire year</i>. Again, this is a far-fetched possibility.<br /><br />The reality is, the "fiscal cliff" provisions will only kick in for weeks, at most, and this hardly will cause recession. But that doesn't make a story you will sit through five SUV commercials to watch, does it?<br /><br />Even assuming this absurd scenario occurs, where Congress does absolutely nothing for a year, the tax provisions, as I noted, are the same ones we had during the highest period of post-war growth in this country. And as for reduced government spending, isn't that what the teabaggers wanted all along? Cutting the Pentagon budget by 10% will hardly cripple our military. Cutting anything by 10% will hardly cripple it. In fact, I suspect you would see some creative cost-cutting measures enacted, if various government departments had to really tighten their belts.<br /><br /><br /><b>3. Milk will cost $8 a gallon after December 31st!</b> This is another alarmist prediction, based on the assumption that dairy price subsidies will jump next year - to 1949 levels. The price of any commodity is based on the demand and supply in the market. In the USA, we are awash in a sea of milk and orange cheese, simply because we have subsidized the production of these two products for so long.<br /><br />The market determines prices, not the government. If milk goes to $8 a gallon, a lot of people will stop buying it, and demand will go down, which in turn will drive prices down. The net result will be that milk will reach an equilibrium in the marketplace<i>.</i><br /><br /><i>If the government is forced to buy milk at inflated prices, this just means the government will end up with a lot of milk on its hands - which may flood the market when the government then tries to unload it. </i><br /><br />Efforts to control milk prices really only affect farmers, not consumers. In California last year, a lot of dairy producers went bankrupt as the State tried to control milk prices and as a result, the cost of producing milk was higher than the state-mandated price. Farmers lost money and went bankrupt. The farmers will suffer from dramatic shifts in price supports, but consumers will simply choose to consume other products.<br /><br />And unfortunately, they already have. Milk consumption is down in the USA - supplanted by cheap soft drinks. Already many Americans are guzzling down cheap soda pop in place of milk. The end of subsidies would likely just accelerate this trend.<br /><br />And as for cheese, I am not sure that prices would go up that much. Imported cheeses are not that much more expensive that American-made cheeses, so again, this acts as a price-check in the marketplace (unless some milk producers start pushing for higher tariffs). And frankly, the same could happen to milk - we would end up, as the largest milk producing country, importing milk on a large scale.<br /><br />So, sorry, I have to call bullshit on this one. The price of milk will be determined by consumer demand, not the presence or absence of subsidies. And frankly, we need to eliminate all of these farm subsidies, anyway, as they act as a distorting factor in our so-called "free market." <a href="http://livingstingy.blogspot.com/2011/02/gub-ment-chee.html">Gub-Ment Chee</a> and <a href="http://livingstingy.blogspot.com/2012/10/food-stamps-for-millionaires-maybe.html">Food Stamps</a> have fans in farm country, but they result in a lot of bad food being made.<br /><br /><i>But of course, all this talk is speculation, as it is unlikely we will go off the "fiscal cliff" for more than a few weeks at most</i>. These price support programs will be re-enacted, unfortunately, and at most, the Dairy farmers may gain wild milk prices - to the government for a week or two. But even this scenario looks to be a little far-fetched. The USDA would have to issue a notice saying it was going to pay the increased price for dairy products, then set up a schedule for when purchases would start, a process that could take a few weeks. And likely, by then Congress will have made a deal and make the reinstatement retroactive to January 1.<br /><br />$8 a gallon milk? <i>Ain't Happening</i>. People will make other choices.<br /><br /><b>UPDATE:</b> It appears a compromise has been reached on dairy price supports. Now Congress acts like it did us all a big favor and "saved the day" when in fact the "peril" we faced was one of their own making. Sheesh! <br /><br /><br /><b>4. People won't know what their tax bills will be! The IRS will be in a panic! People won't be able to file early! Other scary scenarios with exclamation points! </b> Relax, Cletus. It ain't all that bad.<br /><br />First of all, your 2012 tax rates will be unaffected. So there is no "uncertainty" as to how to calculate your taxes for FY 2012. Tax rates for 2013 will be affected, but you don't have to worry about that return until April 15, 2014.<br /><br />And for most people, their taxes - if they go up at all - will go up no more than 3%. The upper marginal rates will go up by that amount, but that applies only to income <i>over a certain level</i>, and as such, it may mean less than a 3% increase in your taxes.<br /><br />Three percent - you think you can handle that? If you can't your finances are in a mess. For poorer people, it is likely they won't pay much more taxes, as most of them don't pay any taxes anyway - their deductions exceed their pitiful incomes as it is.<br /><br />Yes, Captial gains rates may go up, and some very rich people may have to pay a lot more in Capital gains. Boo-Hoo. But for retired middle-class people cashing in their 401(k) plans, their tax rates will still be at ordinary income rates.<br /><br />And as I noted before, you can convert ordinary income into Capital Gains and vice-versa. Mitt Romney pays himself in deferred Capital Gains to get a 15% rate. You can bet if it was cheaper, he would become a salaried employee of Bain Capital and convert those Capital Gains right back again.<br /><br />Companies might pay more dividends, if Capital Gains rates go up. This might be a good thing, as lets face it, Wall Street has been playing the Capital Gains game for so long that Dividends are looked upon as "old school".<br /><br /><i>But of course, all this talk is speculation, as it is unlikely we will go off the "fiscal cliff" for more than a few weeks at most</i>. Tax rates will likely be "fixed" based on some compromise, and likely this will be made retroactive.<br /><br /><b><br /></b><b>5. Your paycheck will drop as your employer will have to withhold more taxes: </b> This one is also specious, with alarmed teabaggers (the ones who wanted a fiscal cliff in the first place) saying things like, "I don't know what my taxes will be! I won't know whether I can buy a new car or not!"<br /><br />Your income taxes might go up by 3% if that. And Obama's "payroll tax vacation" will end, and we will start funding Social Security at the full 9% rate. Your paycheck will hardly be cut in half or anything stupid.<br /><br />Payroll companies have already said they will continue to withhold at the 2012 levels for now. Employers can "make up" any additional withholding later in the year, if need be. But as the Compromise will likely extend tax cuts for the middle class (retroactively to January 1) you won't have to make up anything at all.<br /><br />So again, no fire here.<br /><br /><br /><div style="text-align: center;"><span style="font-size: x-large;"><b>* * *</b></span></div><br />The list goes on and on. Politicans and the Media are both like a child with a toy trumpet. They make noise and want to be heard, and the more you ignore them, the louder they play. "Pay attention to me!" they scream. "What I have to say is important!"<br /><br />And sadly, we have fallen for this, in recent years - thinking that what the media says is relevant to our daily lives and what politicians do actually controls the economy.<br /><br />And both parties play this latter game. Republicans like to say that government doesn't create jobs. But Mitt Romney ran on the platform that he was a "jobs creator" - which was a far cry from Ronald Reagan's platform of "get the government out of the jobs business completely!"<br /><br />Some sort of muddled compromise will be worked out in Washington - it always works that way. The world won't end, and even if Congress decides not to act (which is far-fetched) I am not sure that the result would be all that bad, for most Americans. Our taxes would go up slightly, and government spending would drop by 10%. We would eliminate deficits and people would be forced to go back to work, rather than collect 99 weeks of unemployment.<br /><br />It is sad, in a way, that the Fiscal Cliff provisions <i>won't kick in</i> for very long. Because they really are a strong dose of medicine that this country really needs.devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com1tag:blogger.com,1999:blog-4819938543031050656.post-3688460970461839792012-12-29T11:31:00.000-08:002013-12-13T08:52:00.140-08:00Hidden Costs of Car Buying<div class="separator" style="clear: both; text-align: center;"><a href="http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2008/12/1/1228150017930/Sale-at-new-car-lot-in-Wa-001.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2008/12/1/1228150017930/Sale-at-new-car-lot-in-Wa-001.jpg" width="400" /></a></div><div style="text-align: center;"></div><div style="text-align: center;"><i>There are a lot of hidden costs in buying a car - costs you might not think about while looking at a shiny new car under the bright lights of the dealer showroom. The <a href="http://livingstingy.blogspot.com/2010/03/used-car-dealer.html">dealer</a> says you are approved for the loan, but think about other costs before you sign on the dotted line.</i></div><br />I was having the front-end aligned on the X5 the other day. <a href="http://livingstingy.blogspot.com/2012/12/suspension-work.html">I had replaced the struts, control arms, ball joints, tie rod ends, axle half-shafts, wheel bearings, and a number of other parts</a>, which requires that the front-end be re-aligned (actually all four wheels aligned on this car). While I was waiting, I went though our service records and noticed that there were a lot of costs in owning a car that I had not thought about. (I keep all the records for the car in a big binder with page protectors. It is interesting to see how much you can spend on a car, over time!).<br /><br />When we bought this car, <a href="http://livingstingy.blogspot.com/2012/07/late-model-used-cars.html">secondhand</a>, in Florida, <a href="http://livingstingy.blogspot.com/2012/06/should-you-buy-wrecked-car.html">we paid $25,900 for it</a>. It had a little under 50,000 miles, and was four years old, and the price paid was a little more than <a href="http://livingstingy.blogspot.com/2011/04/low-mileage-used-cars.html">half the retail price </a>when new (again, most cars depreciate about 50% every five years).<br /><br />We've put 100,000 miles on it, over the last six years, and it is showing signs of age. The end game might not be here yet, but I can see it on the horizon, and I am starting to think about what to replace the vehicle with. As its resale value drops to below $10,000, and as small things start to break and become annoying, it is only a matter of time before we have to buy something else.<br /><br />But what? And when? Does it make sense to jump ship now, or hang on until the bitter end? The more I started investigating the matter, the more it dawned upon me that there are a lot of "hidden" costs in <a href="http://livingstingy.blogspot.com/2012/01/new-car-trap.html">buying a new or newer car</a> - costs that we don't think about when looking at the shiny dealer brochures.<br /><br /><br /><b><u>1. Taxes</u></b><br /><br />In going through my records, what staggered me was the sales tax we had to pay to Florida - a whopping 5% or more, totaling <i>over $1500 just in taxes alone!</i> And yes, $1500 is a lot of money. I have bought cars for less than this.<br /><i><br /></i><i>And that is the irony right there</i>. A lot of people will "dump" a used car because it needs $1000 in repairs, and then go out and buy a new (or newer) car and pay $1500 in sales taxes <i>right off the bat</i>.<br /><br />And the tax man doesn't end his bite there. In many jurisdictions, an annual property tax or <i>ad valorum</i> tax is added to your registration fee, or collected separately. Until recently, in Georgia, we paid this tax - about 1.2% every year, or about $250 on a $20,000 car. In Alexandria, Virginia, we paid "personal property taxes" as high as 4.5% on our cars - which could be well over $1000 a year on even a modest mid-sized sedan.<br /><br />And you wonder why this "tax revolt" thing has taken hold in the South.....<br /><br />Your used car, parked in the driveway, requires no sales tax payments. And moreover, since it has a very low "book value" your <i>ad valorum</i> or property tax every year, will be low - and get lower over time.<br /><br />Here in Georgia, <a href="http://www.11alive.com/news/article/234824/40/Sales-tax-AND-ad-valorem-tax-on-vehicles-in-Georgia-being-replaced-by-title-tax">they recently abolished the <i>ad valorum</i> tax</a> and claimed to abolish the "sales tax" on cars. But of course, they just replaced these both with a one-time <i>title tax</i> of a whopping 7%. So on a $20,000 car, you will have to cough up $1400 just in "title tax" before you can drive it home. And yes, $1400 is a lot of money.<br /><br />(<b>UPDATE: </b> In Georgia, the "sales tax" was only applicable to sales from Car Dealers (you would think this would have boosted private party sales tremendously, but most folks don't think that carefully - and that is why these are "hidden" costs). Effective March 1, 2013, the "Title Tax" will be applied to <i>all car sales, dealer or private</i>, and <a href="http://georgia.gov/blog/2012-08-20/ending-annual-ad-valorem-tax">the <i>Ad Valorum</i> tax will go away for cars titled after March 1, 2013</a> (according to the radio). However, the <i>Ad Valorum</i> tax will still be applied to cars you own before then. This amounts to about $50 a car for me. However, you may opt to pay the Title tax between now and then, and avoid the <i>Ad Valroum</i> tax perpetually. It appears that an interesting "loophole" exists between now and March 15. If you buy a car from a private seller between now and then, you can pay the 6.6% sales tax but you won't have to pay <i>Ad Valorum</i> tax. Or, if the car is of lesser value, you may opt to pay the <i>Ad Valorum</i> tax, particularly if you are buying from a private seller and don't plan on keeping the car very long. An interesting calculation would have to be made.)<br /><br />But most people don't think about taxes - or if they do, they think about their Federal Income Taxes, which of all the taxes they pay (if indeed, they pay any) are likely the smallest of any single tax. There are people in the middle class or lower middle class who likely would pay more in sales taxes in any given year than they do in Federal Income tax. <i>But they are all teabaggers and convinced that Obama has "raised my taxes!". Go Figure.</i><br /><br />But to people with poor money skills (which was me, until a few years ago) sales tax is sort of a "whatever" kind of thing - the <i>cost of doing business</i> and a trivial few percentage points. And when the tax is 4% or less, I guess we can think that. But in places like Georgia and New York, where the tax is 7% or more, it becomes a big deal - even for small purchases.<br /><br />Of course, one way to cheat the tax man is to consume less. A $10,000 car has half the tax bill of a $20,000 car, and so on. And this applies to all parts of your life. If you spend a dollar less, the tax man is cheated out of seven more cents. The more you consume, the more taxes you end up paying.<br /><br /><i>The best used car value is often parked in your driveway</i> - as I like to note, time and again. If you decide to "swap" cars on a regular basis, you end up paying a lot in transaction costs alone, including this sales tax or title tax, or whatever - plus other tag and title fees.<br /><br />Of course, eventually, all cars wear out, and you have to get something newer to drive. Death and Taxes - they are unavoidable. But the longer you can cost-effectively keep your car, the less you pay in taxes, overall, in your life.<br /><br />If you have a car that is getting old - but is still serviceable - think about whether you are buying new or newer because you <i>need</i> a new car, or merely because you<i> want</i> one.<br /><br /><br /><b><u>2. Insurance</u></b><br /><br />I have <a href="http://livingstingy.blogspot.com/2010/05/should-you-insure-with-geico.html">very cheap insurance through GEICO</a>. I pay about $16 a month in liability coverage, and if I want it, Collision and Comprehensive is another $17 a month. That's about $420 a year, which is pretty cheap insurance coverage. <i>Most people pay far more than this for car insurance.</i><br /><br />GEICO rocks, and their website is very well done. By going online and logging in, I can get a quote on the cost of deleting one car and replacing with another. If I delete the X5 and replace it with a $22,000 Nissan Pickup truck, my insurance will go up by $295.20 a year.<br /><br />Again, this might not seem like a lot of money to most folks, but it does add up, over time. If you add this to the sales taxes and the <i>ad valorum</i> taxes (if applicable in your jurisdiction), you may be looking at close to $2,000 just in added expenses during the first year - above and beyond the car payments you make.<br /><br />And this is assuming insurance rates remain constant. The big trap - as I have noted before - for younger people, is to buy a new car, get some speeding tickets or get in an accident (or a DUI), and then see insurance rates spike to $3000 a year or more - sometimes far more. At age 25, you can buy a new car, get a few tickets, and literally go bankrupt. <br /><br /><i>And those car payments aren't cheap</i>, either. Even at low, low financing rates, you are looking at $400 a month or more for payments on even a modest car. Paying cash may save you a little in interest charges, but it still takes a huge dent out of your net worth.<br /><br />Again, <i>overall costs</i> trump <i>monthly expenses</i> but most folks only think in terms of the latter.<br /><br /><br /><b><u>3. Loan Costs: </u></b> If you finance a car purchase (new or used) they often tack on "loan document fees" or some other such crap, if you finance through the dealer. Some dealers have the chutzpah to tack on as much as $500 in "document fees" or some such nonsense - if you are dumb enough to pay it.<br /><br />And of course, you pay interest, although today this is far less than the 10% we used to pay. Even if you can get one of these 2.9% financing deals (which are usually a gag - they tell you that you can't qualify and offer you a higher interest rate) then you end up paying $1509.40 in interest, over five years.<br /><br />There are other costs, of course. Many dealers charge you a nominal amount for temp tags and licensing the car. They collect a whole bunch of registrations together and then once a week (or month) send a low-paid flunky down to DMV to stand in line for all of them. This saves you time, of course, but you do pay for it. And as likely they will get you new tags, you will pay a new tag and registration fee as well. This can end up costing $100 to $250 depending on the dealer. If you buy a car from an individual or do the tagwork yourself, you may be able to transfer tags and save some money here. But few people do it. Why? Because they are spending $20,000 or more and think that "$100 isn't a lot of money!"<br /><br />Note that I didn't raise <i>opportunity cost</i> arguments here. A dealer salesman will say stupid things like, "If you pay cash for the car, you are losing the <i>opportunity cost</i> of investing that money!" - particularly when they are trying to <i>lease</i> you a car. The argument makes little sense and can be cut both ways. Buy purchasing the car, period, you are forgoing the <i>opportunity cost</i> of putting $22,000 into your IRA or 401(k), at the rate of $500 a month. Borrowing money to save money is an argument that makes no sense at all.<br /><br /><br /><b><u>4. Overall Cost to Your Net Worth.</u></b><br /><br />The main thing people miss, in buying and selling cars, is the overall cost of the transaction, or the dent it puts in your <a href="http://livingstingy.blogspot.com/2011/01/importance-of-net-worth.html"><i>net worth</i></a>. Let's take a look at the overall transaction costs of keeping the X5 for another five years versus buying the small pickup truck.<br /><br />If we assume that a vehicle depreciates about 50% in value every five years (which is a rational assumption, <a href="http://livingstingy.blogspot.com/2012/04/cars-with-low-depreciation-self.html">as most vehicles fall roughly within this range</a>), the X5 will depreciate about $4500 in five years. The new or newer Nissan pickup will depreciate $11,000 in the same five years.<br /><br />The sales tax will be 7% or about $1540. Since we don't have <i>ad valorum</i> taxes anymore, we can skip that. But the insurance (at $292.20 per year) will be an additional $1462.50 overall, for five years.<br /><br />The gas mileage and general maintenance (oil changes, etc.) will be about the same, although some dealers are offering "free oil changes for life" as an incentive to come back to the dealership often, to sell warranty service or to try to entice an owner into a new car. Oil changes are so infrequent these days, and so inexpensive (if you do them at home) that this is not a major expense. But let's throw in $100 a year for oil changes.<br /><br />Repairs are where things get hard to calculate. It is not possible to precisely predict repairs on an older car. And whether a car will last another X miles is difficult to predict. Usually, what kills off a car is an accident or repair that exceeds resale value. So even a minor collision or an engine or transmission overhaul is enough to send most 10-20 year old cars to the wreckers, in short order. At 140,000 miles, I think we can safely assume that the major components of the X5 will last until 200,000 miles or so, although the engine will likely be using more oil by then.<br /><br />But the car will likely need a new set of tires ($600 to $1200) before then, and perhaps a new clutch ($1200) as well as other miscellaneous repairs and overhauls (although I have replaced so many parts on the car already, that perhaps the latter is not that great). But let's assume $1000 a year for repairs - which is generous - which would amount to $5000 over five years.<br /><br />So, which is the better deal over five years?<br /><br />New (or Newer) $22,000 Pickup truck:<br /><br /><blockquote class="tr_bq">1. Depreciation: $11,000<br />2. Sales Tax: $1,540<br />3. Insurance (increase): $1,462.50<br />4. Repairs: $0<br /><br /><b>Total: $14,002.50</b></blockquote><br />Interesting to note that on a $22,000 truck, the actual costs, over five years, are nearly 3/4 of the sales price. So how does this compare to keeping the older car for five years?<br /><br /><blockquote class="tr_bq">1. Depreciation: $4500<br />2. Sales Tax: $0<br />3. Insurance (increase): $0<br />4. Repairs: $5000<br /><br /><b>Total: $9500</b><br /><br /><b>Savings: $4502.50</b></blockquote><br />So there is considerable savings in keeping the older car<b><i> </i></b><i>- about $1000 a year</i>.<b> </b> Add in loan interest (if applicable) and you've got another $1500 in the mix. And this calculation was made by <i>generously assuming that repair costs would be $1000 per year</i>. But as a consumer, I have some control over repair costs, as I <a href="http://livingstingy.blogspot.com/2012/06/scratch-and-dent-repair-car.html">do a lot of work myself</a> (the front end work cost $700 in parts, whereas a mechanic would have charged over $3000 for such a repair, and <a href="http://livingstingy.blogspot.com/2011/06/never-take-used-car-to-dealer-for.html">the dealer</a>, over $5000) and also I can control repairs to some extent by how aggressively I drive the vehicle. So the savings could be even greater.<br /><br />When you buy a car, you are jumping on a new depreciation curve. You pay $20,000 for a car, your net worth is decreased by $20,000 and increased by the resale value of the car (usually 10-15% less than the price paid for the car, if bought new). And over time, you use up that car, and eventually end up poorer as a result.<br /><br />The longer you can keep a car, the further you come out ahead - <a href="http://livingstingy.blogspot.com/2010/08/bathtub-or-weibull-curve.html">until the car reaches its end game</a>. <br /><br /><div style="text-align: center;"><span style="font-size: x-large;"><b>* * * </b></span></div><br />There are a couple of caveats and "But, what about..." kind of things that I am sure that some folks will point out.<br /><br /><br /><b>1. You'd have to pay the sales tax eventually:</b> Yes, it is true that the X5, like most cars, will go to the boneyard eventually. Even cars that end up as "collectors items" end up going out of service, as they become more <i>talismans of cars</i> than actual cars. People keep an old muscle car in their garage for 40 years, true - but they don't drive it as general transportation, as a general rule.<br /><br />So it is true that this car will be junked someday, and I likely will "fish further upstream" for a newer car. And at that point, I will have to pay that $1540 in sales tax.<br /><br /><i>But a tax deferred is a tax denied</i>. If, over your lifetime, you buy 10 cars for $22,000 each, you will pay $15,400 in sales taxes on those cars (at the 7% rate, anyway). On the other hand, if you can buy 9 cars, or eight cars, you will save $1540 for each car you don't end up adding to your collection.<br /><br />Life is finite, and the number of cars you own is finite. So there is a real savings on deferring a tax, if you can possibly do it. And there is an additional savings in that the money not paid in taxes is money that stays in your 401(k) or could be invested - yielding income over time. And yes, this is an "opportunity cost" argument - but <a href="http://livingstingy.blogspot.com/2012/02/should-you-own-your-home-free-and-clear.html">one that makes sense</a>, when you are saving money (car dealers will use "opportunity cost" arguments to convince you to <i>buy</i>, but <a href="http://livingstingy.blogspot.com/2011/10/why-opportunity-cost-has-no-place-in.html">such arguments are </a><i><a href="http://livingstingy.blogspot.com/2011/10/why-opportunity-cost-has-no-place-in.html">specious at best</a>.</i>)<br /><br />Similarly, while all cars depreciate at about the same rate (about 50% every five years) the cash amount is less as the car gets older. In your lifetime, if you buy 10 cars for $22,000 each and keep each car for five years, you will spend about $110,000 in depreciation. On the other hand, if you buy 5 cars for $22,000 each, and keep each one for 10 years, you will spend about $82,500 on depreciation - a savings of $27,500 over your lifetime (which is more than most people <i>have</i> in their 401(k)).<br /><br /><br /><br /><b>2. Reliability: </b> A lot of people say, "Well, I need a car that is <i>reliable</i> as I have to get to work!" And this is true. But reliability and age of a vehicle, while related, do not necessarily go hand in hand.<br /><br />As I wrote before, <a href="http://livingstingy.blogspot.com/2010/08/bathtub-or-weibull-curve.html">the Weibull curve</a> does kick in, over time, and eventually it makes no sense to keep a car forever. Cars wear out and it is time to junk them - eventually. But the reliability thing is, to some extent, a function of how you care for a car and what kind of car it is.<br /><br />A clunker near the end of its design life, that is treated indifferently, will tend to leave you by the side of the road, on occasion, and this can be inconvenient. But, if you have AAA towing, it need not be expensive. And if you don't <i>panic</i> and throw money at a car, it need not be costly.<br /><br />During my last trip North, the X5 coolant expansion tank (which is pressurized) started to crack. I noticed the "coolant low" light come on more than once, and after refilling the coolant a few times, I noticed that there was a small crack in the bottle. A quick drive to the dealer and $180 later I had a new coolant bottle, which took an hour to replace (it snaps in).<br /><br />Even if I had to go to a mechanic, this would have delayed my trip by no more than a day, and cost maybe $300 to replace - well within my $1000 annual budget above.<br /><br />But of course, many others are not so handy - and many people are <i>afraid</i> of breakdowns "on the road somewhere". Fear is a good selling tool, and not surprisingly, dealers use it to sell cars.<br /><br /><a href="http://livingstingy.blogspot.com/2009/10/fear-least-useful-emotion.html">Fear is never an emotion to be trusted, period</a>.<br /><br />In my experience, however, the "reliability" argument is used by people who <i>want a new car</i> but don't necessarily <i>need</i> one. They get Grandma to <a href="http://livingstingy.blogspot.com/2009/04/never-co-sign-loan.html">co-sign a loan</a> saying "Grandma, I <i>need a new car</i> to get to work! I don't want to <i>break down on the road somewhere</i> and <i>get raped</i>!" And Grandma, finally glad that their granddaughter is "off crack" and "has a job" will fall for this argument, oblivious to the fact that while her 20-something granddaughter is tooling around in a brand-new car, Grandma is driving a 10-year-old Buick.<br /><br />So no, other than <i>end of design life issues</i>, the "reliability" issue makes no sense. Most modern cars can be run reliably for 10-15 years before they reach the end of the Weibull curve. Selling a car at the five-year mark is just vanity. Leasing every three years, even more so.<br /><br />If my car breaks down, I'd just go and <a href="http://livingstingy.blogspot.com/2011/06/should-you-buy-used-rental-car-probably.html"><i>rent one</i> </a>for a while.<br /><br /><div style="text-align: center;"><span style="font-size: x-large;"><b>* * *</b></span></div><br />The point is not that you should <a href="http://livingstingy.blogspot.com/2011/05/why-your-car-wont-last-forever.html"><i>keep your car forever</i></a>. That is not practical, affordable, or physically possible, <a href="http://livingstingy.blogspot.com/2012/07/will-your-car-go-three-million-miles.html">in most cases</a>. The point is that the longer you can keep your existing car, the cheaper it is to drive. Constantly trading in cars every 3-5 years results in a lot of excessive costs, both in terms of sales taxes, as well as depreciation and insurance costs.<br /><br />When <a href="http://livingstingy.blogspot.com/2010/10/will-your-car-really-go-300000-miles.html">repair costs exceed the value of the vehicle</a>, then junk it and buy something newer. But buying new cars, serially, is one sure way to squander a lot of cash.<br /><br />But until then, <i>the best used-car value is likely parked in your driveway</i>. The more crap you buy, the poorer you will be, over time, not richer. <br /><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-71079536476796173412012-12-27T08:33:00.000-08:002013-12-13T08:52:00.228-08:00What is MyLife and why am I to blame for it?<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghGlDowh2DUujVgAoxao-GFxRcl8uxDJpiEpmSbv2ejSFTp9sjKrP_bnYzjSP44X1QczFvtrw9OhMcP0ordF5k071MpNJl1u5WEFKdqx30SXgJOkaZ9o1Ie7tRdhbIsXhyphenhyphenwPV6SAMu5Nc/s1600/mylife.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghGlDowh2DUujVgAoxao-GFxRcl8uxDJpiEpmSbv2ejSFTp9sjKrP_bnYzjSP44X1QczFvtrw9OhMcP0ordF5k071MpNJl1u5WEFKdqx30SXgJOkaZ9o1Ie7tRdhbIsXhyphenhyphenwPV6SAMu5Nc/s1600/mylife.png" /></a></div><div style="text-align: center;"><i>What the heck is this Mylife thing? And how do they find out so much information about you?</i></div><br />If you ever google your own name (an exercise in narcissism, but then again, so is a blog), or that of a friend or family member, you will get hits from a website called "mylife". And if you click on the link, you will see some information about you or the person whose name you entered. Some of it is right, some of it is wrong, and it seems alarmingly personal to some folks.<br /><br />How do they get this information? And what are they doing with it and why? To answer the second question, you need to <a href="http://en.wikipedia.org/wiki/MyLife">read this Wikipedia entry</a> about the company, which was formerly Reunion.com, a website for high school reunions. Apparently they want you to "join" the site and perhaps pay a fee. I would recommend neither.<br /><br />But how do they get this information about you? And should you be worried that personal information is available on the Internet? The answer to the second question is "No" and I'll explain why later. But with regard to the first question, I think you can blame me, in part.<br /><br />Data mining or data-scraping is how the site gets data. And I <a href="http://www.freepatentsonline.com/8019699.pdf">prosecuted the Patent </a>for a company that does this sort of work for Ancestry.com and other sites. It turns out that biographical data is formatted pretty much the same on many sites, and smart neural-network type "learning algorithm" can be trained to fetch such data. Train the program to recognize certain patterns and then set it loose on the Internet, and watch the fun begin. So blame me, if you want to. But I think data harvesting and data scraping are here to stay.<br /><br />What sort of information do they collect on you? Here is my entry on MyLife, apparently scraped from phone books and tax records, and perhaps even obituaries.<br /><div class="person-data"><div><blockquote class="tr_bq"><div class="label-box">URL</div><div class="value-box"><a href="http://www.mylife.com/c-177672001" rel="v:url">mylife.com/c-177672001</a></div></blockquote></div><blockquote><div class="label-box">Places Lived</div><div class="value-box">Jekyll Island, GA<br />Ledyard, NY</div><div><div class="label-box">Phone</div><div class="value-box">(912) 635-XXXX</div></div><div></div><div></div></blockquote></div><blockquote><div class="about-name">About Robert Bell </div><b>Robert Platt Bell </b> was born in 1960. Robert currently lives in Jekyll Island, Georgia. Before that, Robert lived in Jekyll Island, GA from 2005 to 2011. Before that, Robert lived in Ledyard, NY in 2010. <br />Robert Platt Bell is related to Mark See, who is 47 years old and lives in Alexandria, VA. Robert Platt Bell is also related to John Bell, who is 61 years old and lives in Cambridge, MA. </blockquote><br />In my case, the information is accurate, although I have run other people's names in the system and found some data inaccurate - claiming relationships to people with the same last name that are not correct. It is interesting that after publishing online all this information that they somehow felt that the last four digits of my phone number should be blanked out. That data is available on the <a href="http://www.anywho.com/whitepages">online white pages</a> and a number of other sites and indeed, is on my own website. They have privacy concerns about my address and phone number, but not more intimate information. <i>Weird</i>.<br /><br />But getting back to "should you be concerned about this information being online?" I would answer "NO" and let me explain why.<br /><br />First of all, people put up a lot of data about themselves online - a staggering amount and at a startling level of intimacy. So-called self-appointed "Privacy Advocates" scream bloody murder about Google publishing a photo of us walking on a public sidewalk. But at the same time, families put up "family websites" with photos of their children, as well as all sorts of personal information such as when they are leaving on vacation, what time they get home from work, and when little Suzie gets out of swim practice (along with a photo of Suzie in her swimsuit). Burglars, robbers, and pedophiles could have a field day with such data - and yet people post it willingly.<br /><br />And of course, Facebook, Twitter, MySpace and the like take this whole concept to a new level - and then <i>sell the data </i>to marketers. People willingly "like" their favorite restaurants and products and even sign up to link what they buy to their Facebook page. And then they scream about "privacy".<br /><br />But in addition to all of that, there is something called <i>Public Records</i>, which are old as the hills and are now available, at least in limited form, online. You may think you have a lot of privacy in your life, but a lot of what you do is public record, and I, or anyone else, has a legal right to those records.<br /><br /><a href="http://www.cnn.com/2012/12/25/us/new-york-gun-permit-map/index.html">A newspaper recently published the names of gun owners </a>in their County and people got "up in arms" (sorry, again) about it. But the information is public record and a Freedom of Information Act (FoIA) request is all it took to get the data.<br /><br />But there are other records that are easier to find - online - without an FoIA request.<br /><br />For example, property tax records are usually computerized in most Counties - as well as deed data. Usually, the .pdf files of the actual documents are not available online, unless you sign up for a subscription service, or pay a small fee for copies of the documents.<br /><br />But with the click of a mouse, I can find out how much your house is assessed for, what your property taxes are, and whether you have paid them on time. A few more clicks and I can tell when your parents died and whether they left a will. A few clicks later, and I can find that your no-good brother has an unsatisfied judgement against him. These are all recorded at the public records office of most counties, and the abstracted data is available with a click of a mouse.<br /><br />And if you order a copy of the will, people can figure out how much you inherited, etc. <br /><br />Before you get all riled up about this, bear in mind that such <i>public records</i> have been public for generations, and this is not some new "Internet Thing". The Internet just makes such records more easy to retrieve - which may or may not be a good thing.<br /><br />There is lots of other data you can download online as well. That no-good brother, for example, has a mugshot which can be downloaded from some law enforcement sites. And if your sister went to college, I can download an abstract of her Master's Thesis. The list goes on and on.<br /><br />And if you are good at Internet searching, you can spend about 20 minutes and pretty much parcel out how people are living, where they are living, what their income level is, and what they are doing. And all of this is without even looking at their Facebook page or their family website, or whatever.<br /><br />Of course, other sites are also goldmines for data. Newspaper obituaries list relatives of a deceased person and their relationship, which is how MyLife no doubt found my brother (through my Mother's obituary) but for some reason left out my late Sister and other brother. By the way, "MyLife" shows my late sister alive and well at age 63, which is sort of creepy.<br /><br />Employment websites are another source of data. Many sites have biographies of various employees, particularly if they are professionals, teachers, or the like. With a few clicks, you can figure out where someone has been working, what they did, and what they are doing now. And this is all without having to access LinkedIn, either.<br /><br />If you "scrape" discussion groups (which you can search on Google) you might find the person commenting on a news story or on a USENET group from back in the day. This data may fill in other areas of their background - their employment history, where they lived, etc. This may also tell you about their political views or personal views on issues. Product reviews can be very illuminating, particularly when the products are books or personal items. You can tell a lot about a person from what they post online, that is for sure.<br /><br />And if you have their address (which yields all that tax data) you can look at a satellite view of their house on Google Maps, and if they have "street view" you can even see a photo of their house as well as the car in the driveway and its <a href="http://livingstingy.blogspot.com/2011/07/fear-and-paranoia-on-internet.html">license number</a> (and yes, I have done this, and it is creepy). <br /><br />Now, it isn't always possible to do this, of course. You need some seed data to start with. If a person has a unique name (Robert Platt Bell, as opposed to Robert Bell) then it is easier to find information on them. A fellow named "John Smith" is harder to search, unless you have a middle name and a city of residence.<br /><br />The more data you have, of course, the more data you find. If you have a full name, residence, and occupation, even the elusive "Mr. Smith" can be tracked down.<br /><br />(It is funny, but I knew two couples who work or worked for the CIA, and both had a last name of Smith. Maybe it was just a coincidence, but I always gave them a hard time about it).<br /><br />So, I would not sweat "MyLife". In fact, I think it is a classic <i>baiting game</i> they are playing. They scrape all this information and package it and get you <i>worried about it</i>. In fact, this seems to be a common theme among a number of sites, such as <a href="http://www.snopes.com/computer/internet/zabasearch.asp">ZabaSearch</a> and <a href="http://www.snopes.com/computer/internet/spokeo.asp">Spokeo</a><i>.</i> They send you e-mails saying that they have all this personal information about you, and that you should sign up to "opt out" of their site and/or correct the data.<br /><br />In a way, it is like the "Who is searching for you on Facebook?" scams that claim to be able to track who searches for you on Facebook, or who unfriended you, or whatever. These sorts of pitches seem to hit an anxiety point in a lot of people, who are worried about what people are saying about them behind their back. People, it seems, <a href="http://livingstingy.blogspot.com/2010/11/perpetual-high-school.html">never really graduate from High School</a>.<br /><br />Of course, the easiest and cheapest way around this, is to just not give a shit what people are saying about you, or more specifically, what some robot website has scraped about you from public records. Worry more about what you think of yourself than what others think of you.<br /><br />And don't worry that your life is an "open book" as really there is no reason for secrecy in anyone's life - at least not anymore. While you may think your life is special and private, as Facebook as shown us, most of us lead very similar and dull and boring lives. <a href="http://livingstingy.blogspot.com/2010/09/should-you-be-worried-about-privacy-on.html">Everyone's Facebook page looks the same</a>. You are not as unique and special as you might like to think. And being <a href="http://livingstingy.blogspot.com/2010/06/secrect-people.html">weird and secret</a> about the mundane things in your life is just creepy and a form of self-aggrandizement that shallow people use to make themselves appear to be more mysterious and deep than they really are.<br /><br />So, don't sweat it. You life is already an open book. And why shouldn't it be? If nothing else, you will leave an electronic trail or legacy after you die - some indication that you existed on this planet. Trying to be "private" really just means that you won't have existed.<br /><br />That is one way of looking at it.devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-89958805988428284652012-12-26T10:00:00.000-08:002013-12-13T08:52:00.317-08:00The Death of Journalism<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiueJDBEPb7VLCIX6t5NMNpmLF8Ps2WXJD_xFdQJ3UHjw1GJ0Zk_eTZmKeKzY_R7NHT4PH9_aAQFHCZTkPQfEULOjsTpKbgMYmXDlar0q-HFxmcHvGgNrNV8sZpFNgZt7wuxioBXwpsib0/s1600/newspaper.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="265" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiueJDBEPb7VLCIX6t5NMNpmLF8Ps2WXJD_xFdQJ3UHjw1GJ0Zk_eTZmKeKzY_R7NHT4PH9_aAQFHCZTkPQfEULOjsTpKbgMYmXDlar0q-HFxmcHvGgNrNV8sZpFNgZt7wuxioBXwpsib0/s400/newspaper.jpg" width="400" /></a></div><br /><br /><div style="text-align: center;"><br /></div><div style="text-align: center;"><i>A lot of people are crying that newspapers are dying - because of the Internet. But the Internet is little more than a format-change. Journalism started dying long before the Internet came along.</i></div><br /><br />The terms "Journalism" and "Journalist" have taken on new meanings in recent years. We tend to think, without thinking, of "Journalism" as "The News" and a "Journalist" as a Newscaster or reporter, or perhaps a writer for a daily paper.<br /><br />But the terms once had a different meaning. Literally, Journalism referred to keeping a journal, and a journalist as one who wrote for a journal. Mary Chestnut, who wrote a diary of the Civil War, which today is viewed as an amazing historical record, was a Journalist in that regard. She wrote of her life experiences. Samuel Clemens and H.L. Mencken were <i>journalists</i> in the sense that they were people with experiences in life who wrote, not people who set out to be copy writers.<br /><br />Today, Journalists are cranked out by schools, such as the Newhouse School at Syracuse University. And my brief brush with their sort of "Journalism" as a student was a real eye-opener. What passes for writing, in today's papers and online sites, is often horrifically bad. The idea is to get people to buy papers, or today, to click on stories. Gaudy headlines sell papers or generate <a href="http://www.theonion.com/articles/please-click-on-our-websites-banner-ads,30513/">click-through revenue.</a> So the idea is to punch up or sensationalize a story.<br /><br />That is, unless, of course, it might annoy the advertisers or piss off the powers-that-be. In that case, they can turn any story into a series of blandishments that say little or nothing of value, unless you can really read between the lines.<br /><br />I wrote a story for the <i>Daily Orange</i> once, about a student retreat held by S.U. for "student leaders" (which for some reason, included me). A student had recently been raped by a football player and it made the national news. We wanted to discuss this, but the people in charge nixed it. The Assistant Dean of Students, an old battle axe said to me, "Mr. Bell, what you fail to understand is that the football program brings in a lot of money to the school!"<br /><br />So there you have it. Anyone in the football program can do as they please - rape co-eds, or apparently in the case of Penn State, abuse 11-year-old boys. Maybe times have changed since then. And maybe they would have changed sooner had the media not been a complicit ally.<br /><br />I wrote the story, telling what I heard and say. The editor said it was a good story, but I needed to "punch it up with quotes!". That was his line - "punch it up with quotes!" which apparently a professor at Newhouse told him. I thought the one quote - from the Assistant Dean of Students, was punchy enough. But that was the one quote he didn't want to put in. "We don't want to be too controversial" he said, realizing that the school held the purse strings to the student fee, and hence his budget.<br /><br />So the story got watered down and I walked away from it and asked them to take my name off it. It was published as "Students Leaders Attend Retreat, Discuss Student Issues" with three paragraphs of non-alarming fluff.<br /><br />That was the drivel coming out of the Newhouse School back then. And since then, it has gotten worse. Today it is all about capturing eyeballs and click-bait. They want you to "stay tuned" for a story that is made to seem more than it is - or get you to click on a story just so they can get click-through revenue. So they put alarming headlines on plebeian stories. <a href="http://livingstingy.blogspot.com/2008/12/theyre-baiting-you.html">You are being <i>baited</i></a>.<br /><br />And few media outlets are honest enough to say this. Well, there is one, <i>the Onion</i>. In a recent article entitled, <a href="http://www.theonion.com/articles/please-click-on-our-websites-banner-ads,30513/">"Please Click on Our Banner Ads"</a> the satirical newspaper stretched irony so far as to expose the underlying truth:<br /><br /><blockquote class="tr_bq">Oh, I'm sorry. Did you think The Onion actually cared about the integrity of its brand? Or that we paid even one single thought to the expectations of our readers? Or that the enduring quality of The Onion's content mattered even in the slightest? Ha! That's rich. No, none of that stuff matters at all. I mean, don't get me wrong, we want tons of people to go to our website and click on our news stories, for sure. But the only reason we want this to happen is so that their eyes might, by chance, wander over, like little lost children, to a nearby ad. You think the New York Times is any different? Don't kid yourself. What you are taking part in here is not a free exchange of information provided by The Onion as some sort of noble act of public service. Lord, no. What you are taking part in here is, essentially, a scam. A scam in which we trick you in to visiting our website and looking at ads so that some large, omnipotent corporation will give us a big stack of cash. Or a small stack of cash. Or, really, any amount of cash at all, preferably arranged in stacks. </blockquote><blockquote class="tr_bq">By the way, what I just described above is the sole aim of every website on the Internet. Literally, every one of them. It is also the sole aim of every newspaper, every magazine, and every television program. And you—you clueless, literate <i>schmuck</i>—are but a pawn in this game. So just let go. Just accept the fact that you are reading this column right now simply because we can count you as a number on a spreadsheet. You are a pageview, my friend. You are a "monthly unique visitor." One of millions. Nothing more, nothing less.</blockquote><br />There you have it. You are click-bait, nothing more. devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-22206732070986473322012-12-25T20:26:00.000-08:002013-12-13T08:52:00.403-08:00Radio Shack?<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh855-uQlgTPSuzNSyS6k5rN1gzcrSSjmQ6tvEX1O42g3i-SNPSDGpM1N5FcnBER66nc9YR_GXneqevoVt0NKmZrif0TPnDu3vFHa8qkwN5efT3wmCGMP6L7dtDfdZIPFqz-LIGeGftKik/s320/radioshack.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="298" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh855-uQlgTPSuzNSyS6k5rN1gzcrSSjmQ6tvEX1O42g3i-SNPSDGpM1N5FcnBER66nc9YR_GXneqevoVt0NKmZrif0TPnDu3vFHa8qkwN5efT3wmCGMP6L7dtDfdZIPFqz-LIGeGftKik/s400/radioshack.jpg" width="400" /></a></div><div style="text-align: center;"><i>How does this place stay in business?</i></div><br />In a previous posting, I opined that <a href="http://livingstingy.blogspot.com/2011/01/radio-shack-gone-in-2011.html">Radio Shack might be gone in 2011</a>, as many prognosticators had suggested. It was a Zombie company, the living dead, just waiting for that final shotgun blast to the head.<br /><br />But here it is, almost 2013 and the company still is in business.<br /><br />But for how long?<br /><blockquote class="tr_bq"><br /><table cellspacing="0" class="earning_history"><tbody><tr><th><a href="http://www.streetinsider.com/ec_earnings.php?sort=earning_date&q=RSH" title="Sort by Date">Date</a></th><th></th> <th><a href="http://www.streetinsider.com/ec_earnings.php?sort=qtr&q=RSH" title="Sort by Qtr">Qtr</a></th> <th><a href="http://www.streetinsider.com/ec_earnings.php?sort=reported&q=RSH" title="Sort by EPS">EPS</a></th> <th><br /></th> <th><br /></th><th><a href="http://www.streetinsider.com/ec_earnings.php?sort=revenue&q=RSH" title="Sort by Revenue">Revs</a></th> <th><br /></th> <th><br /></th> <th title="Guidance"><br /></th> <th><br /></th><th><br /></th> </tr><tr class="LiteHover" style="background-color: transparent;"><td>10/23/12 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/RadioShack+Corporation+Sets+Date+For+Third-Quarter+2012+Earnings+Announcement/7795357.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" style="cursor: move;" title="Conference Call" /></a></td> <td>Q312</td> <td class="nowrap">-$0.33</td><td><br /></td><td><br /></td><td>$1B</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr><tr class="LiteHover" style="background-color: transparent;"><td>7/25/12 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/Radioshack+Corporation+Sets+Date+For+Second-Quarter+2012+Earnings+Announcement/7589616.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" title="Conference Call" /></a></td> <td>Q212</td> <td class="nowrap">-$0.21</td><td><br /></td><td><br /></td><td>$953.2M</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr><tr class="LiteHover" style="background-color: transparent;"><td>4/24/12 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/RadioShack+Corporation+Sets+Date+for+First-Quarter+2012+Earnings+Announcement/7351341.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" title="Conference Call" /></a></td> <td>Q112</td> <td class="nowrap">-$0.08</td><td><br /></td><td><br /></td><td>$1.01B</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr><tr class="LiteHover" style="background-color: transparent;"><td>2/21/12 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/RadioShack+Corporation+Sets+Date+for+Fourth-Quarter+2011+Earnings+Announcement/7157224.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" title="Conference Call" /></a></td> <td>Q411</td> <td class="nowrap">$0.12</td><td><br /></td><td><br /></td><td>$1.39B</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr><tr class="LiteHover" style="background-color: transparent;"><td>10/25/11 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/RadioShack+Corporation+Sets+Date+for+Third-Quarter+2011+Earnings+Announcement/6872336.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" title="Conference Call" /></a></td> <td>Q311</td> <td class="nowrap">$0.15</td><td><br /></td><td><br /></td><td>$1.03B</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr><tr class="LiteHover" style="background-color: transparent;"><td>7/26/11 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/RadioShack+Corporation+Sets+Date+for+Second-Quarter+2011+Earnings+Results+and+Conference+Call/6655010.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" title="Conference Call" /></a></td> <td>Q211</td> <td class="nowrap">$0.31</td><td><br /></td><td><br /></td><td>$941.9M</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr><tr class="LiteHover" style="background-color: transparent;"><td>4/25/11 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/RadioShack+Corporation+Sets+Date+for+First-Quarter+2011+Earnings+Announcement/6434542.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" title="Conference Call" /></a></td> <td>Q111</td> <td class="nowrap">$0.33</td><td><br /></td><td><br /></td><td>$1.06B</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr><tr class="LiteHover" style="background-color: transparent;"><td>2/22/11 <img src="http://www.streetinsider.com/images/icons/check-icon.gif" title="Confirmed" /></td><td><a href="http://www.streetinsider.com/Press+Releases/RadioShack+Corporation+Sets+Date+for+Fourth-Quarter+2010+Earnings+Announcement+and+Investor+Conference+Call/6270018.html"><img src="http://www.streetinsider.com/images/icons/telephone.png" title="Conference Call" /></a></td> <td>Q410</td> <td class="nowrap">$0.51</td><td><br /></td><td><br /></td><td>$1.37B</td><td><br /></td><td><br /></td><td><br /></td><td><br /></td><td><br /></td></tr></tbody></table></blockquote>Note that "revenues" are not <i>profits</i> but merely gross income. Net profit per share at Radio Shack is negative, which means they are losing money.<br /><br /><br />The earnings trend does not look good. But oddly enough, their revenues are relatively flat, if not trending upward slightly. What is really crazy is that even as the company is losing money, it is still paying dividends!<br /><br /><br /><table align="Center" border="1" cellspacing="1" class="dataGrid" id="dividendhistoryGrid" rules="all"><tbody><tr align="left" class="evengr" style="font-weight: bold;"><th scope="col"><a href="http://www.blogger.com/blogger.g?blogID=3937637033844218209">Ex/Eff Date</a></th><th scope="col"><a href="http://www.blogger.com/blogger.g?blogID=3937637033844218209">Type</a></th><th scope="col"><a href="http://www.blogger.com/blogger.g?blogID=3937637033844218209">Cash Amount</a></th><th scope="col"><a href="http://www.blogger.com/blogger.g?blogID=3937637033844218209">Declaration Date</a></th><th scope="col"><a href="http://www.blogger.com/blogger.g?blogID=3937637033844218209">Record Date</a></th><th scope="col"><a href="http://www.blogger.com/blogger.g?blogID=3937637033844218209">Payment Date</a></th> </tr><tr class="oddgr"> <td><span id="dividendhistoryGrid_exdate_0">5/30/2012</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_0">0.125</span> </td><td><span id="dividendhistoryGrid_DeclDate_0">5/17/2012</span> </td><td><span id="dividendhistoryGrid_RecDate_0">6/1/2012</span> </td><td><span id="dividendhistoryGrid_PayDate_0">6/22/2012</span> </td> </tr><tr class="evengr"> <td><span id="dividendhistoryGrid_exdate_1">3/14/2012</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_1">0.125</span> </td><td><span id="dividendhistoryGrid_DeclDate_1">2/16/2012</span> </td><td><span id="dividendhistoryGrid_RecDate_1">3/16/2012</span> </td><td><span id="dividendhistoryGrid_PayDate_1">3/30/2012</span> </td> </tr><tr class="oddgr"> <td><span id="dividendhistoryGrid_exdate_2">11/22/2011</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_2">0.5</span> </td><td><span id="dividendhistoryGrid_DeclDate_2">10/25/2011</span> </td><td><span id="dividendhistoryGrid_RecDate_2">11/25/2011</span> </td><td><span id="dividendhistoryGrid_PayDate_2">12/15/2011</span> </td> </tr><tr class="evengr"> <td><span id="dividendhistoryGrid_exdate_3">11/23/2010</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_3">0.25</span> </td><td><span id="dividendhistoryGrid_DeclDate_3">11/8/2010</span> </td><td><span id="dividendhistoryGrid_RecDate_3">11/26/2010</span> </td><td><span id="dividendhistoryGrid_PayDate_3">12/16/2010</span> </td> </tr><tr class="oddgr"> <td><span id="dividendhistoryGrid_exdate_4">11/24/2009</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_4">0.25</span> </td><td><span id="dividendhistoryGrid_DeclDate_4">11/9/2009</span> </td><td><span id="dividendhistoryGrid_RecDate_4">11/27/2009</span> </td><td><span id="dividendhistoryGrid_PayDate_4">12/16/2009</span> </td> </tr><tr class="evengr"> <td><span id="dividendhistoryGrid_exdate_5">11/25/2008</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_5">0.25</span> </td><td><span id="dividendhistoryGrid_DeclDate_5">11/6/2008</span> </td><td><span id="dividendhistoryGrid_RecDate_5">11/28/2008</span> </td><td><span id="dividendhistoryGrid_PayDate_5">12/17/2008</span> </td> </tr><tr class="oddgr"> <td><span id="dividendhistoryGrid_exdate_6">11/27/2007</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_6">0.25</span> </td><td><span id="dividendhistoryGrid_DeclDate_6">11/12/2007</span> </td><td><span id="dividendhistoryGrid_RecDate_6">11/29/2007</span> </td><td><span id="dividendhistoryGrid_PayDate_6">12/19/2007</span> </td> </tr><tr class="evengr"> <td><span id="dividendhistoryGrid_exdate_7">11/29/2006</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_7">0.25</span> </td><td><span id="dividendhistoryGrid_DeclDate_7">11/6/2006</span> </td><td><span id="dividendhistoryGrid_RecDate_7">12/1/2006</span> </td><td><span id="dividendhistoryGrid_PayDate_7">12/20/2006</span> </td> </tr><tr class="oddgr"> <td><span id="dividendhistoryGrid_exdate_8">11/29/2005</span> </td><td>Cash</td><td><span id="dividendhistoryGrid_CashAmount_8">0.25</span> </td><td><span id="dividendhistoryGrid_DeclDate_8">9/30/2005</span> </td><td><span id="dividendhistoryGrid_RecDate_8">12/1/2005</span> </td><td><span id="dividendhistoryGrid_PayDate_8">12/19/2005</span></td></tr></tbody></table><br /><br /><br />What is up with that? As I discussed before with regard to dividend stocks, dividends are great, provided the company is making money to pay for them. When a company pays dividends while losing money, the end result is that the company is eating itself. <br /><br />And the market seems to be recognizing this, as the share price has dropped below $2 - down from as much as $11 in the last year (you have to feel sorry for those who paid that much for the stock!).<br /><br />What is going on here? Is the company merely failing, or is it being driven into the ground (<a href="http://livingstingy.blogspot.com/2012/01/how-to-drive-company-bankrupt-for-fun.html">Bain-style</a>)? After all, if revenues are flat, why are profits (earnings) dropping? Part of the problem might be debt load, part might be tighter margins on newer cell phone products. Part might be <a href="http://seekingalpha.com/article/328302-radioshack-s-problem-is-management-not-the-economy">poor management a</a>nd poor cost controls. Or is <a href="http://247wallst.com/2012/06/12/radio-shack-left-for-dead-dies/">Amazon taking down another brick-and-mortar store?</a> Or could it be all of the above?<br /><br /><a href="http://www.star-telegram.com/2012/08/01/4144424/is-radioshack-a-bankrupt-dinosaur.html">As this article noted</a>, the company's debt rating is in the tank. With about<a href="http://www.wikinvest.com/stock/Radioshack_%28RSH%29/Data/Long-Term_Debt"> $700 Million in debt</a>, until recently, the company had a pretty hefty load (although according to some sources, the company had, at least until recently, about $500 Million in cash and cash equivalents).<br /><br />It is hard to know what is going on at Radio Shack, which is a good reason not to bet on it. As I noted in a <a href="http://livingstingy.blogspot.com/2011/12/2012-end-for-sears-well-see.html">previous posting about Sears</a>, it can take a long time for a company to finally sputter and die. No company can continue indefinitely with negative earnings. And I for one am not convinced that the company has the cache in the market to attract customers anymore. There is no value in the Trademarks and underlying good will. To my mind, Radio Shack used to mean a place you went to buy resistors and solder - until it morphed into a place to buy cheap radio-controlled cars.<br /><br />2013 will be an interesting year for a lot of companies like Radio Shack, Sears, J.C. Penny, Martha Stewart, and others - companies that have been hemorrhaging cash and whose business models are outdated or out of style.<br /><br /><br /><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-1681408892395430772012-12-25T09:05:00.000-08:002013-12-13T08:52:00.491-08:00Insights from Annual Credit Report<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE1B9ggy8YuowgXioDPl7Fconu9XPRRJyuHcB8zI4qpTLFnFo4JyNZlxxFYBYn3uuoAg0VnZky7ePBsEwuMIamMzArYabmY0d8zsD1TFEomBiu6Da_bqweybCFJM_rNdL9x6ReThsBVA4/s320/annualcreditreportdotcom.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE1B9ggy8YuowgXioDPl7Fconu9XPRRJyuHcB8zI4qpTLFnFo4JyNZlxxFYBYn3uuoAg0VnZky7ePBsEwuMIamMzArYabmY0d8zsD1TFEomBiu6Da_bqweybCFJM_rNdL9x6ReThsBVA4/s320/annualcreditreportdotcom.jpg" /></a></div><div style="text-align: center;"><i>It's that time of year again. Time to go see a movie and get Chinese take-out - and run my Annual Credit Report.</i></div><br /><br />Christmas is a dull time, nothing to do except see a movie and get Chinese take-out. Everything else is closed, although this is changing as retailers realized everyone is bored out of their minds staying with family, so they want to go shopping.<br /><br />Myself, I run my <a href="http://livingstingy.blogspot.com/2011/12/my-christmas-tradition.html">annual credit report</a> - although at this stage in my life, I really don't need to do so, as I have no debts and no need for debt. <br /><br />(And by the way, if you want your free annual credit report, go to annualcreditreport.com for the real deal, not that faked-up "free" one which is a scam. )<br /><br />Nevertheless it is an interesting exercise and a good way to monitor for illegal activity involving your credit.<br /><br />And it provides some insights, too. Profound ones. I came away with several:<br /><br /><blockquote class="tr_bq">1. I took out a lot of mortgages in my life, many of them re-fis. I paid a lot of fees to refinance debts, which was just a way of moving debt around and creating more debt, over time.<br /><br />2. I had a lot of credit card debt at one time - <i>tens of thousands of it</i>. I am lucky I had the assets to sell to pay them off. <i>Most folks don't</i>. The amount of interest paid, over time, was staggering.<br /><br />3. I had a mortgage payment of over $2700 a month at one time - on a 30 year note. Do the math on this! The income stream needed to support that debt load was well over $100,000 a year. And for what?</blockquote>This last item was illuminating. If I had paid off the note on that loan, I would have paid nearly <i>a million dollars</i>, over time, on a loan having a principal of $350,000.<br /><br />And yet, that is not an unusual amount for a mortgage in many parts of the country. And yet these same people claim they will never be able to save up a million dollars by retirement. But they will pay nearly half that much in interest, over time!<br /><br />And other folks will say, "Well, it makes no sense to pay off a mortgage or pay it down, as it is tax-deductible interest!" But even if you are in the 35% tax bracket, it only means that you get back maybe $200,000 of this interest expense, over time, on your taxes.<br /><br />Not paying $2700 a month (I've paid less than that for <i>cars</i>, for chrissakes!) means that I can put aside more and live on far less - two big pluses when heading to retirement.<br /><br />"But," you say, "Everyone needs a place to live! You have to have a mortgage when you first start out!"<br /><br />And that is true. But in my case, I didn't "need" a $350,000 mortgage so much as I ended up with one. I started out with a $180,000 mortgage and worked my way up - using home equity loans and refinancing to add to my debt over time (as housing values increased) rather than paying down debt.<br /><br />This is a familiar scenario to many people - many of my friends and acquaintances - as they lived beyond their means then then paid for it all with borrowed money from phantom equity in their homes.<br /><br />I was lucky, of course. Or smart, or both. I had equity in investment Real Estate that I could sell and pay off all this debt. This meant, of course, having less "stuff" but it also meant being debt-free.<br /><br />A lot of folks at my age and station in life are not so lucky. Middle-aged professionals, making the six-figure salary, figure they are "doing OK" as they are making all their bills every month. They owe the bank more on their home that they paid for it, thanks to refinancing. And the term of their mortgage will extend well into their retirement years at this point.<br /><br />They have to hope that they never lose their job and that their house continues to increase in value, over time, so they can sell it before they retire.<br /><br />Debt is a trap - a huge trap. If you are already in it, there is not much you can do. But as someone who escaped from that trap by <i>gnawing off their own leg</i>, let me tell you younger folks to think twice before stepping in it. You may not be as lucky as I was.<br /><br />The economy will improve in the next 5-10 years, and interest rates may remain low. It will be tempting, as your salary increases, to take on more debt for consumer toys, a larger house, or whatever. And when the payments get to be too much, it will be tempting to "refinance" that debt in a home equity loan and then leverage yourself further. <i>This was the pattern for the middle class over the last decade</i>.<br /><br />Learn from the mistakes of my generation, if you can. Debt is a deadly trap, and there is no easy way out of it. The best thing you can do is avoid stepping in it.devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-48690344377915719512012-12-24T19:50:00.000-08:002013-12-13T08:52:00.581-08:00Gun Nutz<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmhY_b_9lzxZ_7ySMiINWePYKfxivxbwE7IC2IjrJPfMXE4y8RR3bpg3LNouOmrwGM_yeq8LasVd9n7IvpZO8uqmdy539GXPwyayngO-4WfB5djDLBBfyvRC7AMDRuFKRqoJSXT3GV3wU/s1600/Gun_Collection_2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmhY_b_9lzxZ_7ySMiINWePYKfxivxbwE7IC2IjrJPfMXE4y8RR3bpg3LNouOmrwGM_yeq8LasVd9n7IvpZO8uqmdy539GXPwyayngO-4WfB5djDLBBfyvRC7AMDRuFKRqoJSXT3GV3wU/s320/Gun_Collection_2.jpg" width="320" /></a></div><div style="text-align: center;"><i>Want to creep out your friends, make yourself unattractive to the opposite sex, as well as basically unemployable? Start collecting high-powered weaponry! Gun Nutz are just that - crazy. And no one likes crazy people!</i></div><br />The recent shootings in America (and there a lot of them, every day, that do not get reported beyond the local papers) have everyone "up in arms" (if you will pardon the pun) about gun control.<br /><br />The NRA, which represents <i>4 million members</i> (out of a country of 300+ Million) has Washington terrorized. Cross the NRA and you will not get re-elected! Those 4 million people must vote twice or something.<br /><br />But the NRA is an interesting beast. Many of my hunting friends are disgusted with it. They keep their membership only to get member benefits and discounts. Others have dropped their memberships, particularly when Wayne "Call Me Crazy" LaPierre says offensive and bizarre things. George HW Bush <a href="http://www.snopes.com/politics/guns/bushnra.asp">tore up his life member card</a> in 1996 over LaPierre's comments following the Oklahoma City bombing.<br /><br />The idea that the NRA represents the voices of all gun owners is flawed. And as hunting declines in popularity in this country, more and more of the "hard core" NRA membership comprises gun collectors who collect arsenals of assault weapons - spending the weekend shooting up old appliances and cars (instead of deer or paper targets) on modern, automatic-weapon-friendly shooting ranges.<br /><br />As sales of hunting rifles have dropped, sales of assault-style firearms to non-hunters has risen. The NRA is following the market - or perhaps leading it. By creating demand for high-power weaponry (and arsenals of weapons) among citizens, the NRA primes the pump on sales. And every time new gun legislation is talked about, the NRA raises the alarm - and gun sales skyrocket.<br /><br />As I noted in another posting, <a href="http://livingstingy.blogspot.com/2009/07/gun-trap-do-you-really-need-one.html">I have nothing against firearms.</a> Owning a rifle or shotgun for hunting is not a bad thing. You might even buy a handgun for "protection" - although as I noted, it is like buying a <i>parachute </i>on the premise you might fall off a tall building. It is an expensive form of protection, <i>and the odds you will need it are slim</i> - and the odds you will have it, at the right time and right place, are even slimmer. But the odds that it will go off at the wrong time and hurt someone - including yourself - are pretty high.<br /><br /><i>But that is the thing about poor and stupid people (which are overlapping groups): One profound tagging characteristic of the poor is their inability to comprehend probability or understand their real risks in life. They over-insure for long-shots, while leaving huge vulnerabilities unprotected. They gamble in casinos, convinced they can "win" when the odds are stacked against them. They are convinced that confronting a criminal is a common even in life, but that failing to save for retirement is nothing to worry about. The less you understand probability, the poorer you will be.</i><br /><br />The odds of you being a victim of a violent crime are slim - despite what you see on the television (which is all crime shows, mostly). The odds that you will "twart" a crime with a gun of your own are infinitesimal. That is the sum and substance of it, really, if you want to believe the real numbers. The NRA prefers instead to tout <i>anecdotal evidence</i> of robberies and other crimes thwarted by gun-toting citizens. The reality is, this rarely happens in real life.<br /><br />But hey, if you want to buy a pistol, then go for it. <i>Just be very careful with it</i>. I have a number of friends who have or had guns, and from what I can see, many of them are not very careful. They <i>show them off </i>to friends (a bad idea in and of itself), for example, not realizing they are loaded (an even worse idea). And this happens a lot, too. Just the other day, some guy shot his own kid, not realizing there was a bullet in the chamber. Dumb, yea, but with a gun, there often is <i>no second chance</i>.<br /><br />Out in the country, we have rifles and pistols for other reasons - dispatching rabid raccoons, for example. They do have legitimate uses. And having a firearm around - kept safely - can be handy.<br /><br />But there are a number of people in this country who are not just buying a pistol for protection or a rifle to go hunting with. They buy <i>many weapons</i> - often dozens - and thousands of rounds of ammunition. They hoard guns and then spend their leisure time shooting them. These are what I call "Gun Nutz".<br /><br />Now granted, some are <i>collectors</i>, looking to own a number of fine antiques. These are not what I am talking about. The collector values a gun for its rarity, craftsmanship, cultural or historical significance. They take care of them, shoot them only occasionally (if at all), and cherish them as part of a collection.<br /><br />The Gun Nutz are more concerned with <i>firepower</i> - how many rounds the gun will hold, its "stopping power" and the like. And when they shoot, they don't go after paper targets, but rather, like little children, like to shoot at old cars or appliances, to witness the destruction involved. Or they shoot at watermelons, secretly pretending it is someone's head they are exploding with their teflon-coated "cop-killer" bullets.<br /><br />Gun Nutz are just <i>plain crazy</i>.<br /><br />And unfortunately, this kind of crazy makes people shy away from them, which in turn leads them to feel more and more isolated. Many of them - usually men - take up this form of hobby as a means of feeling more powerful - part and parcel of the <a href="http://livingstingy.blogspot.com/2011/02/culture-of-belligerence.html"><i>Culture of Belligerence</i></a> that I wrote about before. They buy guns to feel more in control of their lives, which are often on the verge of falling apart. And of course, part of this is due to the face they spend so much money on guns.<br /><br />And Gun Nutz make all sorts of crazy claims which are part and parcel of their craziness and distance from reality:<br /><blockquote class="tr_bq">"Our freedom to own firearms is the only thing preventing our country from turning into a Police State!" one says, neglecting to realize that most of Europe, Japan, Australia, and a number of other countries have more <i>reasonable restrictions</i> on firearms (but not outright bans, despite what they may say) and are hardly <i>Police States</i>.<br /><br />"No country would dare attack us, because our citizenry is armed!" another says. Again this sense of self-aggrandizement raises its ugly head. Our country is safe because we have the largest arsenal of nuclear weapons in the world, plus the largest Navy, Army, Air Force, and Marine Corps - and a Defense budget larger than <i>the next ten largest countries combined</i>. That is what is keeping us free, not a bunch of yahoos shooting at washing machines in a gully on the weekends.</blockquote>But again, Gun Nutz live in their own little world, full of conspiracy theories, and dark secrets, usually spread by e-mails and wacky websites - information that the "mainstream media" doesn't want to read, of course! They are, nuts.<br /><br />And I predict that is only a matter of time before they start arguing that the recent shootings were in fact <i>staged</i>, so "Obama can use them as justification to take away our guns!" Coming soon to a conspiracy website near you!<br /><br />The problem with being Gun Nutz is that is isolates you from society. Normal human beings will shun you for being crazy (because you likely<i> are a little off</i>) and thus add to your feelings of isolation. Relying more and more on reinforcement from fringe websites and peer groups, the gun nut will become more and more paranoid, and thus buy more guns. And the NRA is complicit in this scheme, as they crank up the paranoia to level 11 in every publication and plea for more money. Like the fundamentalist churches, they claim to be persecuted, even as everyone goes out of their way not to step on any toes.<br /><br />And one sure way to improve your mental health is to <i>stop acting crazy.</i> Renounce <a href="http://livingstingy.blogspot.com/2009/01/conspiracy-theories-other-time-wasters.html">conspiracy theories</a> (which are total time wasters and do nothing for your personal life) and stop acting weird. Pretty soon, you may actually stop <i>being weird</i>. It can't hurt to try, can it? <br /><br /><div class="post-message publisher-anchor-color " data-role="message">I had a friend who had a small arsenal of about 15 guns - rifles, shotguns, pistols, etc, including an assault-style rifle. And no, he didn't hunt, either. He lived in a nice wealthy suburban neighborhood that was hardly "dangerous". He lived in <a href="http://livingstingy.blogspot.com/2011/08/crank-up-fear.html"><i>fear</i> </a>of being robbed or burgled. And f<a href="http://livingstingy.blogspot.com/2009/10/fear-least-useful-emotion.html">ear is an emotion not to be trusted</a>. He was always having financial troubles, but every spare dollar he put into weaponry and ammo. <i>And he was creepy and weird</i>. He had trouble making friends and finding a mate. Women got creeped out by him after a date or two, particularly when he suggested they go to the firing range. Maybe that works as a romantic date in <a href="http://livingstingy.blogspot.com/2011/01/wacky-conservatism.html">Wasilla, Alaska</a>, but in most urban areas, it just makes people edgy. <br /><br />And his friends and employers started to view him as an oddball - and wonder when he would "go off" with all these weapons that he had for <i>no apparent real reason</i>. His view of the world was paranoid. He was convinced that he would be robbed, burgled, mugged, or assaulted at any given moment. And of course, he held wild right-wing views and listened to talk radio all day long. He was a <a href="http://livingstingy.blogspot.com/2011/01/political-junike.html">political junkie</a>, and made his personality so toxic that no one wanted to be around him - except his Mom.<br /><br />Another fellow, at the Patent Office, brought his gun to work, so he could park in a bad part of town and walk to the office. This was, of course, a violation of Federal Law. And on one dark night, some kids jumped him, and he pulled out his gun. They took it away from him and shot him with it, killing him. The NRA made him a poster-boy for gun rights, even as he was killed <i>with his own handgun</i>. Go figure.<br /><br />Was it really worth it?<br /><br />He was a creepy dude, too. Never bathed. And he had a life-sized poster of Oliver North on his office wall. The last time I saw him, he couldn't understand why he wasn't getting any job offers from law firms. Can you think of some reasons why you wouldn't hire him? I can.<br /> <br />These are the same kind of folks who are buying gold or building bunkers for "the end times". But none of them are funding their 401(k) as they think "Wall Street is a scam". Betting on the rapture as your retirement plan is pretty short-sighted. The reality is, you will likely get old and retire, and be broke, sitting in your bunker with your 20,000 rounds of moldy ammunition and canned goods.<br />Is that how you want to live? Really? All you gun nuts? <i>There is another way.....</i></div><br /><div class="post-message publisher-anchor-color " data-role="message">People who collect guns are creepy and weird. Frankly, almost everyone I know who has multiple firearms (not for hunting) is someone I would not be surprised to hear about in the news as a mass-shooter. But even if they don't "go off" over time, these sorts of people are <i>creating their own misery </i>in life, one gun at a time. With every purchase, they push themselves closer and closer to weirdness. And the end result is, well, the spokesman for creepy and weird, Wayne "Call Me Crazy" LaPierre.<br /><br />No one likes gun nuts, except other gun nuts, which probably lends to their isolation and feelings of alienation. You go down the gun-nut road, expect to end up like this disturbed kid and his Mom (who was not a "warm and caring person" if she kept an AR-15 in the house, PERIOD) or like <a href="http://www.theatlantic.com/politics/archive/2012/04/quote-of-the-day-ted-nugent-threatens-barack-obama/256025/">Ted Nugent</a> (who said, live on stage, that he wanted Obama to suck on his machine gun and make Hillary "ride" it as well - sick, sick, sick!).<br /><br /><i>Fun people, huh? </i>And Fox News had Nugent as a regular contributor. And yes, it is a crime to threaten the President, and the Secret Service paid a visit to Mr. Nugent as a result of his "joke". He is one sick MF, is all I can say. And his music sucks.<br /><br />Maybe what we need are <i>public service announcements</i>, like they have for cigarettes - to drive home the point that owning a lot of guns isn't cool - its just <i>creepy and weird</i>. Maybe if gun nuts understood the reason the rest of us avoid them is because we think they are crazy. And no one likes crazy.<br /><br />And to all of you folks who say stupid stuff like "Guns don't kill people, people kill people", I am TALKING ABOUT YOU. You are creepy and weird and no one likes you - because you use guns to overcompensate for your feelings of inadequacy and powerlessness. They are just mechanical penises.</div><br />The NRA argues that "Well, any attempt to regulate firearms won't work 100% of the time because....." And that is true, nothing is 100% effective, whether it is seatbelt laws or whatever. You can only try to improve the situation, not make things PERFECT. The NRA argument is that if you can't do something that is 100% effective you might as well NOT BOTHER TRYING. Makes sense, right? Unless something works all the time, why bother? But even if we could reduce the incidence of these types of crimes by 50% or even 10%, it would be worthwhile to do SOMETHING.<br /><br />And they dig this up every time there is a shooting. "Well, existing gun laws clearly don't work, so why pass more?" Well, of course, one reason they don't work is that the NRA has insured that any existing gun laws are so crippled so they don't work. The instant background check is a good idea, but covers only sales through gun stores. Buy at a gun show or from a neighbor, and the system isn't applicable.<br /><br />That would be akin to saying marijuana is illegal to sell - in grocery stores. Such a law wouldn't do much, would it?<br /><br />Every time there is a mass-shooting like this, the NRA trots out the same tired old arguments:<br /><blockquote class="tr_bq">1. " HOW DARE YOU bring up gun control, so soon after a tragic incident?" - an effective argument, as there are so many "tragic incidents" that they overlap these days, effectively <i>cutting off any debate</i>. My response: HOW DARE THE NRA tells us when we can talk about things!<br /><br />2. "Unless the Proposed Reform works 100% of the time, why bother trying?" See above. Again, this is an effective argument for cutting off all debate, as no solution will work all the time. Even in countries with gun control laws, like the UK and Denmark, there are shootings. JUST NOT AS MANY.....</blockquote><blockquote class="tr_bq"> 3. "Guns Don't Kill People, People Kill People!" - this is a non-sequitur and makes no sense at all. This week, a man went into a classroom in China and assaulted a number of kids - with a knife. No one died as a result. Why? Because it is a lot harder and takes longer to kill with a knife. Guns are different than other weapons.<br /><br />4. "They have gun laws in Europe and I read about a shooting there the other day!" Again, the 100%-or-nothing argument, with some <i>anecdotal evidence</i> tossed in. Gun laws in Europe <i>do work</i> and the evidence of this is in the utter lack of significant gun crime there. Yes, they have crime there, but on a scale far, far smaller than in the USA. Isn't <i>less crime</i> a desirable thing?</blockquote><blockquote class="tr_bq">5. "The mainstream media never reports how many crimes are thwarted by gun-carrying citizens! Why just the other day in Squirrel Hollow, a rapist was stopped by a man with a gun!" The media doesn't report these stories as there are <i>not that many of them</i>. In terms of crime-stopping, people carrying handguns thwart a pathetically tiny fraction of crimes. Again, <i>ancedotal evidence</i> is not real evidence. It is just stories people tell each other like the stories about "voter fraud" the GOP likes to toss around. </blockquote><br />Expect to see more damage control in the next few weeks, as the NRA circles the wagons and raises these same three issues, again and again.<br /><br />Yea, Gun Nutz have a firm grip on reality, that's for sure!<br /><br />But the main thing is, if you want to be a gun nut, you are intentionally going down a path of poverty and privation. Most gun nutz are from the lower classes and by spending thousands and even tens of thousands of dollars on weaponry and ammunition, they keep themselves there.<br /><br />I have seen people who can barely feed themselves and who are "living paycheck to paycheck" go out and buy a $500 pistol and spend hundreds of dollars on ammunition every weekend at the firing range, firing it. To solve this problem, they go out and by a match target pistol (another $250) that fires cheaper ammunition.<br /><br />Yes, it is fun to have a hobby, but if you can't afford to fund your retirement, think hard before you spend bucks on guns. And think about how it is going to affect your social life and employability.<br /><br />Because when you go to a job interview spouting off conspiracy theory shit and showing people pictures of your gun collection on your iPhone (yes, I have seen this) your resume goes in the trash.<br /><br />There is no profit in being a gun nut!devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-35342757236956407512012-12-24T13:14:00.000-08:002013-12-13T08:52:00.668-08:00Magic Wands - Get Out Of Debt Guy Site<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDgOakVhlyhMgKUi5wIemtrSUIFzVyib8oHj-BZPJi89Tizh3dWWmZEiwZYpqIPdT1P7ItNcvbkcT5R6bkhTBVkjXEqJOo4XowtpP7PE87TZARy82INRXkiv3qsukAL-a-mK1_cOidXrI/s1600/wand.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDgOakVhlyhMgKUi5wIemtrSUIFzVyib8oHj-BZPJi89Tizh3dWWmZEiwZYpqIPdT1P7ItNcvbkcT5R6bkhTBVkjXEqJOo4XowtpP7PE87TZARy82INRXkiv3qsukAL-a-mK1_cOidXrI/s320/wand.gif" width="285" /></a></div><div style="text-align: center;"><i>When people get into debt, they want someone to wave a magic wand and make it go away. This makes them vulnerable to debt reduction scams. It also means they tend to wait until things horribly go wrong before taking action.</i></div><br /><br /><br />I get regular updates from the <a href="http://getoutofdebt.org/">Get Out Of Debt Guy</a> site, which is a horror show of a site, as it has entries from all sorts of white trash, with their sob stories of stupidity and debt. In 99% of the cases, these people got into debt over their head through utter stupidity - buying crap on time and then taking on onerous loans as a means of "tiding themselves over" without figuring out how they could pay back a 14% to 25% interest rate loan over time, if they can't even make their paycheck last to the end of the month.<br /><br />There are a few sad cases were people have medical debts. But the advice there is pretty simple: Declare Bankruptcy and start over. Instead, they try to make payments on a debt that will never get paid off. They tear through their pitiful savings in their IRA or 401(k) and then decide that maybe it isn't happening. And only then, when they are utterly destitute, do they think about Bankruptcy.<br /><br />And what most of these people are looking for is a <i>magic wand</i>, which the Get Out Of Debt Guy doesn't have. They want their debts to "go away" without any effort or work on their part, and without declaring Bankruptcy. And of course, it goes without saying that they don't want to give up Cable TV, their Smart Phone, or the Harley.<br /><br />So these folks engage in <i>wishful thinking</i>. What is the harm in that? A lot. What usually ends up happening to them is this:<br /><blockquote class="tr_bq">1. They take on more debt to pay off debt - debt consolidation loans, home equity loans, and the sort. This does not reduce debt, just makes the payments last longer and lowers the monthly payments slightly. The consumer congratulates himself on this financial acumen and runs up more debt. After all, with lower monthly payments, he can "afford" it - right? Wrong.<br /><br />2. They try to make payments on loans they cannot afford, and go through their savings - which might be protected in Bankruptcy - instead of cutting to the chase.<br /><br />3. They send off money to people who promise to "reduce debt - without Bankruptcy!" - folks who claim to have <i>magic wands</i>. Such folks, of course, are charlatans, and they just take your money and do nothing. About half the letters to the Debt Guy are along the lines of "how can I get my money back from them?" or "How can I make them take action on my debts?" <i>They just don't get it</i>. They signed onerous loan agreements, and now they have tossed money away to a Con Artists - and yet <i>they still believe</i> that it will all work out somehow.<br /><br />4. As the debts pile up, they start going after more and more onerous and odious deals in life - payday loans, title pawn loans, whatever, as a means of "tiding themselves over". More debt is just gasoline on the fire at this point, but <i>they don't get it</i>. They are engaged in self-immolation.<br /><br />5. Rather than seek out a legitimate Bankruptcy Attorney (because in Redneck parlance, "Lawyers are a rip-off!") they just let things go to collection and have judgements recorded against them. The car gets towed, the house foreclosed upon, wages are garnished, bank accounts seized. Instead of taking action early on and possibly preserving some of these assets and getting some breathing room, they wait until they are nearly homeless before they take action.<br /><br />6. At this point, they don't even have the $500 to pay a real Lawyer for a basic Bankruptcy proceeding. And moreover, they've made their finances so complicated that the poor Lawyer who does take their case will spend months untangling it all - if he can do much of anything at that point.</blockquote>So how do you "get out of debt" like the <a href="http://getoutofdebt.org/">Get Out Of Debt Guy</a> says you can do? Well, first of all, let's address how you got in. You have to get out of the mindset that debt is <i>normal</i>, <i>desirable</i>,<i> and inevitable</i>. It is basic math. If you make $50,000 a year, borrowing $10,000 more doesn't make you $10,000 richer, but rather $5,000 poorer, after you get done paying all that interest and other charges. And with each debt you take on, you <i>risk your financial future and well-being</i>. So debt should not be taken on for frivolous reasons like smart phones (which really are a debt instrument, as they have fixed contracts that basically pay off the cost of the phone over time) or a motorcycle, a bass boat, a pool table, or whatever.<br /><br />If you take on debt, do it for smart things - your first house, or a <i>real</i> education. And be smart about it. Get the best rates and shop around. Buy as much house as you need, not what you want. Don't take out private student loans and ask parents to co-sign. Go to a real school, not a for-profit college. Major in something useful, not frivolous. And borrow only what you need to get by, not stuff that just makes you comfortable. Yes, it is true, many students borrow money on private student loans so they can have four years of cable-TV while in college. That's about $5000 right there - and a distraction from your studies!<br /><br />Even a car loan is a frivolous loan. People say they <i>need</i> a car, but what they really <i>want</i> is a brand-new one, and a fancy one at that. So they pay through the nose and pay a ton extra for collision insurance, drive it badly, drive their rates up, and end up over a barrel. Maybe when you start out, a loan from your credit union for a short term to buy a used car is not a bad idea. Spending big bucks on a new car at age 22? Just dumb.<br /><br />OK, you say, fine advice. <i>I get it</i>. I fucked up by not taking this seriously. Now I am over a barrel, how is this going to help me? I need to know how to get out, not how I got in. But it is important to know how you got into debt, otherwise, any efforts to get out will be short-circuited by the same bad behaviors that got you into debt. You will pay down debt and then think, "Gee, I can go spend more money, now!" and end up back where you started. It is like congratulating yourself for losing 20 pounds by eating a whole chocolate cake. It makes no sense.<br /><br />But once you figure out how you got into this mess - and who is to blame (you, not the government or the banks). You can take steps to get out:<br /><br /><blockquote class="tr_bq"><br /><b>1. Cut services, sell stuff: </b>If you are falling behind on your bills, or "living paycheck to paycheck" or even "making all your payments" but <i>not saving for the future</i>, you are <i>living beyond your means</i>. The only way out of this is to <i>lower your lifestyle standards</i>. You are living a lifestyle you can't afford, and you need to come to grips with this. You can't have it all, so figure out what it is that you really <i>need</i> and get rid of the rest. And a lot of what you think you <i>need</i> is really just crap you <i>want</i>. You will have to do this, no matter what you do in the next steps, otherwise you will end up where you started in a few years. So do this and do it now. Cut Cable, get rid of cell phones, sell that hobby car, bike, boat, etc. You can't afford it. You only think you can. $100 a month is $125,000 out of your 401(k) at retirement.<br /><br /><b>2. Figure out if you can pay your debts:</b> Chances are, you can't. Most people, once in debt, will never get out, without Bankruptcy. But if you can sell enough crap and cut cable TV, cell phones, get a roommate, or whatever, you might be able to whittle down the debt, over time. I was able to do this, only because I had a lot of crap to get rid of - and was not ashamed to cut <i>everything</i> to the bone! On the other hand, if you are already severely delinquent and have high interest loans, forgetabout it! You are headed to Bankruptcy, and the sooner you go there, the better.<br /><br /><b>3. Declare Bankruptcy: </b> If you have more debts than assets and not enough income to pay off your debts, <i>you are bankrupt, by definition</i>. Cut to the chase and go for it. Find a real Bankruptcy Lawyer, not some stupid online con-man, and talk to him. Bankruptcy won't discharge all your debts, but it will preserve your 401(K) and IRA (which is a good reason to have both) and allow you to keep some things like your car and tools of the trade (in some States) and work out payments on some debts. This surely beats watching your car be towed away and your bank account be drained. And it puts a dead halt to collection agencies.<br /><br /><b>4. You have a fresh start - don't blow it! </b> A lot of people who declare bankruptcy end up in the same trouble down the road, as they just go back to doing what they were doing before, only worse. Within a decade, they are back at step 1, and on their way to step 3 again. <i>If you want to be a perpetual SLAVE in life - owing money for junk and crap and feeling put upon, that is a lifestyle choice, not a preordained condition.</i> Look around and think about what you really want out of life. Is a fancy car worth not funding your retirement? Is having a Harley worth worrying about making the payments? And what happens to this debt bandwagon if you get sick, get in an accident, lose your job, or the economy tanks? Why live on the knife's edge of life so you can have a fancy cell phone? Re-think your priorities and start accumulating real wealth.</blockquote><br />Now, of course, this advice all falls on deaf ears. People read this and whine, "But Bob! That's haaaarrrrd! I wanna keep all my crap and wave a magic wand and make the bad things go away!"<br /><br />And I wish I could help you, but life doesn't work that way. Life may seem harsh and difficult, but if you confront it head on, as opposed to living in denial, it is not as scary as it seems. But this requires you to live in the real world, not some pot-smoke clouded fantasy land.<br /><br />Do the hard thing. It pays off in the long run.<br /><br /><b>A Special Note About Student Loans:</b> Student Loans, at the present time, are not discharged through bankruptcy, unless "extreme hardship" can be shown. And living without a smart phone is not "extreme hardship". Such hardship discharges (usually adjustments) have been few and far between. But help might be on the horizon.<br /><br />First, though, put your debt into perspective. I have seen former students whining about $25,000 to $50,000 in student loan debt. This is the price of one or two medium-priced cars in the United States. Considering that in your lifetime, you will pay off the loans on 5-10 cars, this is hardly a staggering amount of debt to pay off. Once you start making money, and as time and inflation devalue the dollar, you will look back and laugh at how you worried about such trivial amounts. It may seem like a lot of money now, but in 5-10 years, you likely will be buying a house worth twice to three times that amount. Put things in perspective!<br /><br />The other thing is that in 2012, <a href="http://www.huffingtonpost.com/2012/10/16/obama-student-loan-repayment-plan_n_1969860.html">new programs have been initiated</a> to allow for some Student Loan Debt relief. Two programs tie the payments to a percentage (10% or 15%) of your annual income for a number of years, making it easier to make the payments when you first get out of college. But these programs apply toward Federally guaranteed student loans only. Private loans might not qualify. Many people apparently <a href="http://business.time.com/2012/06/12/why-have-so-few-student-loan-borrowers-have-taken-advantage-of-income-based-repayment/">don't even know about these programs</a>, as they are not well advertised, and the application process is not easy.<br /><br />There are proposals for a "<a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&ved=0CG0QFjAF&url=http%3A%2F%2Fhansenclarke.house.gov%2Fsites%2Fhansenclarke.house.gov%2Ffiles%2Fdocuments%2F1-pager%2520SLFA.pdf&ei=XMLZULD3JJKc8wTQr4DADA&usg=AFQjCNE5GQlXl9JQQ5QU3dAocd104owLUA&bvm=bv.1355534169,d.eWU">Student Loan Forgiveness</a>" act that would allow you to pay 10% of your <i>discretionary income</i> for ten years, and then forgive the remainder of the debt. However, this is merely a proposal at this point, and would apply to Federal Student Loans only, not private loans. <a href="http://www.govtrack.us/congress/bills/112/hr4170">According to some sources</a>, this act (which is currently in committee) has a 5% chance of being voted on, and a 1% chance of passing. Don't get your hopes up.<br /><br />And if you are reading this and contemplating a Private Student Loan and/or going to a "For Profit" University - RUN AWAY as fast as possible. Such degrees are worthless and such loans are toxic.<br /><br />There are ways to go to college and even graduate school on a budget, but it requires you to think hard, work hard, and scrimp and save - all hard things. But if you really are smart enough to go to college, you should be able to figure these things out.<br /><br />There are no magic wands. There are no <a href="http://livingstingy.blogspot.com/2010/12/genie-effect.html">Genies</a> out there. Sorry to be bearer of bad tidings, but that is the nature of the world and reality. The good news is, of course, that reality is very value-neutral, and if you choose to live in it (as opposed to fantasy-land) you will do well in this world.<br /><br />All you need do is <i>act rationally in an irrational world</i>. Others will squander while you save, and you will come out on top!<br /><br />devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-55872951360152285892012-12-23T22:24:00.000-08:002013-12-13T08:52:00.754-08:00Ugly Little Bears<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYmi-9mA7ywB18eFZG9eC4YYgqSz3FkZU2Ku9_KiPuyVwmR8UlH9IzJFIMHpKY_1JiGkPUgAAvwoa1QgUttKjsr3ozgwduTbAusfaBGXQOXkTU94PrjDAbMRKlHvMwsyk-ufLHHxuPHyQ/s1600/princess-history.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYmi-9mA7ywB18eFZG9eC4YYgqSz3FkZU2Ku9_KiPuyVwmR8UlH9IzJFIMHpKY_1JiGkPUgAAvwoa1QgUttKjsr3ozgwduTbAusfaBGXQOXkTU94PrjDAbMRKlHvMwsyk-ufLHHxuPHyQ/s320/princess-history.jpg" width="240" /></a></div><div style="text-align: center;"><i>Nearly two decades ago, people tried to convince themselves that these ugly little stuffed bears were "collectibles" and would be worth thousands. What makes people think this way?</i></div><br />Remember <a href="http://en.wikipedia.org/wiki/Beanie_Baby"><i>beanie babies</i></a> and the hoopla surrounding them? For some reason these mass-produced stuffed bears (made in China and Indonesia, the source of the cheapest things on earth) were thought to be worth a lot of money. They came out in 1993, and within a couple of years, people were going nuts over them.<br /><br />And as usual, it was the white trash and the poor who got sucked into this "collectible" nonsense. These are the people who buy Franklin Mint crap and Elvis commemorative plates. <br /> <br />By 1999, the fad had ended, and production was halted. From peak to valley, the fad lasted less than five years.<br /><br />It is, alas, yet another example of <i>poverty-think</i> and one reason I am giving up this blog. You just can't convince stupid people of common sense.<br /><i><br /></i><i>But I'll try: </i> A mass-produced item from China will never be "collectible" and it will never be "valuable" just because the manufacturer says it will be so. In fact, any manufactured good can be replicated, once its value rises far enough. You want a numbers-matching Hemi Cuda? People can make one for you. It is as simple as that.<br /><br />And stupid little bears? Be serious.<br /><br />Even the Beanie Baby manufacturer is trying to throw cold water on this. The "Princess Di" bear, arguably one of the most "collectible" of all of them, is worth maybe $50 to some weeping Mom who still misses the "People's Princess". <a href="http://www.tycollector.com/the-scoop/princess-bear.htm">From the Ty website:</a><br /><br /><br /><table align="center" cellpadding="4" cellspacing="0"><tbody><tr><td class="style15" colspan="4" style="height: 25px;"><span class="unit">Current Princess Beanie Baby Values</span><span class="Intro-pg-title"></span></td></tr><tr><td class="style15" colspan="4" style="height: 25px;"><span class="news"><i>Princess</i> values updated - December 1, 2012<br /><br /></span></td></tr><tr><td class="style12" style="height: 25px; width: 18%;">Country</td><td class="style12" style="height: 25px; width: 20%;">Swing Tag</td><td class="style12" style="height: 25px; width: 38%;">Pellets shown on Tush Tag</td><td class="style12" style="height: 25px; width: 22%;">Value Range *</td></tr><tr><td class="style13" style="height: 25px; width: 18%;" valign="top">China</td><td class="style13" style="height: 25px; width: 20%;" valign="top">No space</td><td class="style13" style="height: 25px; width: 38%;" valign="top">P.V.C.</td><td class="style13" style="height: 25px; width: 22%;" valign="top">$20 - $45</td></tr><tr><td class="style13" style="height: 25px; width: 18%;" valign="top">China</td><td class="style13" style="height: 25px; width: 20%;" valign="top">No space</td><td class="style13" style="height: 25px; width: 38%;" valign="top">P.E.</td><td class="style13" style="height: 25px; width: 22%;" valign="top">$15 - $20</td></tr><tr><td class="style13" style="height: 25px; width: 18%;" valign="top">Indonesia</td><td class="style13" style="height: 25px; width: 20%;" valign="top">No space</td><td class="style13" style="height: 25px; width: 38%;" valign="top">P.V.C.</td><td class="style13" style="height: 25px; width: 22%;" valign="top">$35 - $50</td></tr><tr><td class="style13" style="height: 25px; width: 18%;" valign="top">Indonesia</td><td class="style13" style="height: 25px; width: 20%;" valign="top">No space</td><td class="style13" style="height: 25px; width: 38%;" valign="top">P.E.</td><td class="style13" style="height: 25px; width: 22%;" valign="top">$15 - $20</td></tr><tr><td class="style13" style="height: 25px; width: 18%;" valign="top">Indonesia</td><td class="style13" style="height: 25px; width: 20%;" valign="top">Space</td><td class="style13" style="height: 25px; width: 38%;" valign="top">P.E.</td><td class="style13" style="height: 25px; width: 22%;" valign="top">$5 - $10</td></tr><tr><td class="style13" style="height: 25px; width: 18%;" valign="top">China</td><td class="style13" style="height: 25px; width: 20%;" valign="top">Space</td><td class="style13" style="height: 25px; width: 38%;" valign="top">P.E. no number inside tush tag</td><td class="style13" style="height: 25px; width: 22%;" valign="top">$6 - $20</td></tr><tr><td class="style13" style="width: 18%;" valign="top">China</td><td class="style13" style="width: 20%;" valign="top">Space</td><td class="style13" style="width: 38%;" valign="top">P.E. red number inside tush tag</td><td class="style13" style="width: 22%;" valign="top">$5 - $15</td></tr><tr><td class="style7" colspan="4" style="height: 25px; width: 18%;"><br />* Values shown in this table apply to a <i>Princess</i> in like-new condition with mint swing and tush tags. <i>Princess</i> without a swing tag is worth only one or two dollars..</td></tr></tbody></table><div style="text-align: center;"><br /></div><div style="text-align: center;"><span style="font-size: x-large;">* * * </span></div><br />So, you would think that would put a little damper on this idea that a $10 bear is worth hundreds, or maybe <i>thousands of dollars</i>, right?<br /><br />Guess again. Dozens of these insipid little bears on on eBay as I speak, with "buy it now" prices ranging from <i>$500 to $2,000,000.</i><br /><br /><i>No really</i>. People want more for a stuffed bear than a vintage Ferrari. They want more for a stuffed bear than I paid for my <i>house</i>:<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnT5m-gCOOmkuiisUR8LAjXqJ3Vwf4J5ChQlMRbUzESFeRaBi6z0TA2NLJgHKPT2DTVojauj17Q_nM90xcEGbIhO0zeQIbJiwuret5wHXNOCgcXjVJgGcTybbXCBToduPuiWkrnO41iRk/s1600/dream+on.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnT5m-gCOOmkuiisUR8LAjXqJ3Vwf4J5ChQlMRbUzESFeRaBi6z0TA2NLJgHKPT2DTVojauj17Q_nM90xcEGbIhO0zeQIbJiwuret5wHXNOCgcXjVJgGcTybbXCBToduPuiWkrnO41iRk/s400/dream+on.jpg" width="210" /></a></div><div style="text-align: center;"> <i>Pages and pages of these ugly bears are on eBay, often asking hundreds of thousands of dollars in price. And yet there are literally hundreds for sale. Not very rare, desirable, or collectible, are they?</i> <i>(click image to enlarge and have a good chuckle).</i></div><br />One of the listings says the bear is "museum quality" - but what museum, pray tell, would have such a thing? The only museum I could find that has beanie babies is the Strong Museum ("the museum of play") in Rochester, New York, and then only because Ty <i>gave them 700 of the damn things.</i> In white-trash fantasy world, museums pay millions for beanie babies, likely at auctions like Sotheby's. But I digress.<br /><br /><i>Rareness does not equate to value, period.</i> I picked up a stone on the beach the other day. It has a neat little line through it that is green. It is unusual and unlike any other stone I have seen. In fact, it is unlike any other stone on the planet. It is unique.<br /><br /><i>But it is worth nothing.</i> Because it has no real function or use. No one really wants to cherish it. No one wants it for any real use that another stone couldn't be used for. And even if they really wanted it, they really could just take another stone sort of shaped like it and chisel it into shape. The earth has abundant resources and labor is cheap.<br /><br />But, people will convince themselves that things have intrinsic value based on <i>perceived rareness</i> and by <i>perceived demand</i>. The problem with the former has already been illustrated. The problem with the latter is that it can evaporate rapidly.<br /><br />The beanie baby craze collapsed a few years after it started. People who paid top dollar for beanie babies realized that they had been had. I recall after the fad died, a friend of mine <i>gave me a bucket of them</i> which I sold on eBay for $1 to $2 apiece at the time. They were just beanbag stuffed animals, nothing special, collectible or even interesting to look at, play with, or display. <i>No one wanted them anymore</i> - when months previous, they were highly coveted. Human nature works that way - how interesting is that?<br /><br />And the same thing has happened to other "collectibles" over time. People lose interest, and more importantly, the <i>media hoopla</i> that hyped these "investments" is quickly forgotten. Things that have no intrinsic value (or little intrinsic value) tend to lose their value over time.<br /><br />But people like to think this way. Someone tried to tell me that a clapped out old snowmobile was worth money because it was a "Limited Golden Anniversary Edition" - as if a set of gold stickers on the side of the cowling negated the seized engine beneath it. The fellow buying the "Limited Edition" car thinks that somehow it is special or rare, compared to the base model, when in fact hundreds of thousands just like his, were made.<br /><br />It is like that stupid "Antiques Roadshow" on PBS, where the yokels bring in some ugly old cuckoo clock or a chair that is so rickety no one can sit in it. And the guy says, "Gee, this would bring $5,000 at auction!" which of course it wouldn't - he is likely pulling numbers out of his ass. Most of the junk is so ugly it hurts your eyes. But these specious appraisals make the yokel's eyes light up - as they are so in awe of money, but <i>understand nothing about it.</i><br /><br /><i>The really fine antiques?</i> Yes, they sell for staggering sums. You go to a place like <a href="http://www.winterthur.org/">Winterthur</a> and look at the furniture there, and you realize pretty quickly the sad shit in your attic is really crap. Either it was inexpensive furniture when it was made, or it is in very bad condition and not worth much - or it is not very old, really, and thus not worth a lot. Keeping ugly broken junk because "it is old and worth something" is idiotic. If you don't like how it looks or works, sell it. Chances are, anything you get for it is a good deal. Most antiques do not appreciate at a rate much faster than inflation. Like collecting old cars, you are deceiving yourself if you think you will make money at it - unless you are a dealer of such items.<br /><br />And yes, this same effect applies to <i>gold</i> as well - which I have written about before, at length. Gold has value based on <i>demand alone</i>, and not any intrinsic value, other than as jewelry and for electronics, which makes up a minor part of the overall demand. Most of the demand driving up the price of gold is from people hoarding it, thinking it will go up even further in value. When that demand slackens, and people start to sell their hoards, what will happen?<br /><br />Same thing that happened to beanie babies. But like the brave lady (or fellow) listing the two million dollar beanie baby on eBay, there will always be <i>true believers</i> out there - convinced that values will hold, if not in fact go up over time - if only enough people believe they will.devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-78001340129255216732012-12-20T10:37:00.000-08:002013-12-13T08:52:00.842-08:00Merry Christmas From Costco!<div class="separator" style="clear: both; text-align: center;"><a href="http://willmarre.com/blog/wp-content/uploads/2010/12/Costco.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="226" src="http://willmarre.com/blog/wp-content/uploads/2010/12/Costco.jpg" width="320" /></a></div><div style="text-align: center;"><i>Costco also pays a special dividend this year! Ho! Ho! Ho!</i></div><br />I just logged into my e*trade account and found another present under the Christmas Tree. <a href="http://www.nasdaq.com/article/costco-wholesale-corporation-cost-exdividend-date-scheduled-for-december-06-2012-cm195301#.UNNXy6y3pqA">A $7 per share dividend as a special year-end bonus</a>. Costco normally pays a quarterly dividend of about 25 cents, or about 1.11% rate of return at the current share price.<br /><br />I bought a while ago, so my rate of return is more like 2%, which illustrates why long-term investing can pay off handsomely compared to short-term burn&churn.<br /><br />$7 a share amounts to about a 7% rate of return on the stock, which on top of the 1.11% (or close to two percent) I am getting, means a rate of return this year alone, of nearly 9%. <i>And who says the good old days of high returns are behind us?</i><br /><br />That in addition to the 60% increase in stock price since I bought it - I am happy with this "Stock Pick" to be sure.<br /><i> </i><br /><i>But what is going on here? Why are companies paying out high, one-time, year-end dividends? </i><br /><br />Well, there are a number of explanations to be sure. And one of them is the fiscal cliff the the looming tax increases, both in capital gains and ordinary income, for 2013.<br /><br />Taxes are likely to go up in 2013. It is just a matter of how much, and on who. Capital gains may go to 20% under Obama's proposal. Ordinary income rates may go up for the very wealthy.<br /><br />By paying out a dividend, a company can "pay" its shareholders in income, rather than capital gains. For people like me, in the 15% bracket, this might save me money, if capital gains rates go up. <br /><br />But of course, most shareholders are in higher brackets, and paying dividends in 2012 means the income is taxed at 2012 rates, not 2013 rates. This also means that Costco might not pay as much in dividends in coming years, to compensate for the special dividend.<br /><br />Costco cited the "fiscal cliff" or more specifically, the specter of higher taxes, as the reason for the dividend payment. <a href="http://money.cnn.com/2012/11/28/investing/costco-dividend/index.html">But they also cited a second reason</a> - greater access to Capital. If you can borrow money freely, at low rates, then why hoard money in a company? On the other hand, if money is tight, then you want to keep cash to pay for expansion, rather than borrow.<br /><br />That whole free ability of capital thing again.<br /><br />Having a lot of cash on your balance sheet has other problems for a company. Like with Apple, shareholders demand a slice of the Apple Pie (sorry) and demand they pay dividends. And if you are cash-rich, you become a takeover target, as folks on the outside see an opportunity to take over, steal the cash, and then sell the shell of the company to chumps on the NASDAQ.<br /><br />Whatever the reason, it looks like a good dividend season! Merry Christmas!devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0tag:blogger.com,1999:blog-4819938543031050656.post-78254076599437642042012-12-20T08:53:00.000-08:002013-12-13T08:52:00.952-08:00Merry Christmas From Access National Bank<div class="separator" style="clear: both; text-align: center;"><a href="https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcT-Ei-Op-YogIoSgUtFFENgRBZJcKKiQbG5sl8zBeGtuRs6OWyGUQ" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcT-Ei-Op-YogIoSgUtFFENgRBZJcKKiQbG5sl8zBeGtuRs6OWyGUQ" /></a></div><div style="text-align: center;"><i>Sometimes investments really pay off.</i></div><br />I got my Christmas present early this year. The Board of Directors at Access National Bank decided to offer a 70-cent special year-end dividend, which came today in the form of a check for over $1300.<br /><br />As you know, I bought this stock when a friend of mine helped start the bank about 12 years ago. I was offered founders shares and the most I could scrape up was $10,000 at the time.<br /><br />Over the years, I have sold $30,000 of this stock, and today the remaining balance is still worth close to $20,000.<br /><br />In addition to this special dividend, it cranks out a dividend of 6 to 8 cents a share, every quarter.<br /><br />Not a bad return on my investment!<br /><br />Now, if I had only invested $100,000 in the bank, where would I be?<br /><br />Oh, but time machines! They are such devious things!devihttp://www.blogger.com/profile/16337011690004721154noreply@blogger.com0